Understanding the Great Depression
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- Опубліковано 26 вер 2024
- In this video, we examine the causes behind the Great Depression with the help of the aggregate demand-aggregate supply model.
In 1929, the stock market crashed and an air of pessimism swept across America -- making bank depositors nervous. What would you do if you thought your money might not be safe with the bank? You’d probably want it back in your own hands. What happened next? A run on the banks.
Along with the Stock Market Crash of 1929, it’s one of the iconic moments of the early days of Great Depression. However, the Great Depression was an incredibly complex downturn in which the economy experienced a series of aggregate demand shocks. By the end of this video, you’ll walk away with a better understanding of the many factors behind the Great Depression and how to apply the AD-AS model to a real-world scenario.
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I have to give a lot of credit to the producer of these videos. The sound effects make them that much more enjoyable. Well done.
Amen for bringing up the Smoot Hawley tariff! People rarely talk about how much it contributed to the depression.
The great depression was an economic hangover caused by the debt fueled excesses of the "roaring twenties" and was caused by the Federal Reserve, the illegal Central bank of the United States, who raised interest rates after keeping them too low for too long. The Fed exacerbated and extended the problem by not allowing the excess debt in the system to default and restructure by performing bailouts and continuing to manipulate interest rates lower than the free market would allow. The Fed thought the cure to too much debt from the 20's was more debt so they lowered interest rates even more. This resulted in a tremendous transfer of wealth and power to the banks and bank controlled government under Roosevelt. Sound familiar?
Hey, this sounds legit. Where did you get this information? I would love to read / watch more about it.
My 2022 gift! I love your videos. Highly insightful and well explained. Definitely following and recommending your channel.
Thanks! Just in time for my exam.
Thank you for all the info about the depression the more we know the better chance of surviving the upcoming one please pay attention
Brilliant work! Keep it up!
why was inflation 0 to begin with? and why did the fed let the money supply fall by 30%? does it have to do with the gold standard?
It helps me to explain tomorrow in class thank you sir😊
Nice video! I would emphasize that the cause and exacerbation of the Great Depression can be laid at the feet of the government (and especially the Fed). We had plenty of prior panics and recessions, but it took the existence of the Fed (established in 1913) and statist presidents (Hoover and Roosevelt) to plunge the U.S. into full-blown depression. The NLRB, AAA, CCC, FDIC, etc. were either ineffectual or downright disasters (e.g., misallocated capital, paying farmers to dump perfectly-good milk in the street, digging ditches and filling them back in again, creating a moral hazard in terms of bank deposits).
Perhaps a video comparing the recession of 1907 to 1921 to 1929 would be a valuable place to start. Also, a video explaining why it wasn't government diverting otherwise productive resources to building bombs and tanks and blowing things up (i.e., the broken window fallacy) that ultimately took us out of the Depression.
This video came up on my feed, and is actually a decent primer on the subject: ua-cam.com/video/2Ce6z-u_Wk0/v-deo.html
I guess this video was removed because of wrongthink
The stock market became a casino that for years only grew in the roaring 20s leading to false expectations for constant gains leading to very heavy leverage and risk taking by millions of Americans, as many invested every penny of their money in to the market and many others took out loans to gamble with and lost more than they had leading to banks failing as well when they could not collect on the over leveraged loans. Another major factor was that the USA was exporting record goods to Europe after the end of WW1 as much of Europe was destroyed. However by 1927 countries like Germany had reached pre WW1 GDP leading to a drop in demand and the USA had a glut of goods leading to falling prices. The Great Depression had 6 years of deflation spiral. Another issue was that the FED had to maintain gold reserves on hand leading to the FED being unable or unwilling to save the economy by providing liquidity. The FED failed but the gold standard was the culprit.
The music in this video makes me feel like I'm learning video game lore
very well explained.. Thanks a lot.. Can you please help me out with the recovery from Great Depression- experiences of UK and USA?
There is a sorrow here that weeping cannot symbolize. There is a failure here that topples all our success … in the eyes of the hungry there is a growing wrath. In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage.
Now I understand my history class!
Yes, more about the great depression.
Astonishing video!🙏
Thank you so much!
Glad you liked it!
-Roman
Shout out to Dr. Wilson's class!!!
Talking about financial shocks in 1929 compare to the shocks today. We have tornados and flooding (instead of drought) in the plains so farmers can not plant food. Soybean, Corn and Meat farmers have tariffs with Mexico and China so there are lower sales there. We have the federal reserve unable to hit their inflation target. We have student debt at record levels so the younger generation can not spend money on consumerism. We already had the banks fail back in 2008. We have people moving due to higher property taxes in some states. We have the government looking to break up tech companies as anti trust.
This deserves a lot more views! Thank you! :)
This is a good video. It is worthy.
Please make a full and detail video about great recession
We have a playlist that gathers up our various videos on the great recession: ua-cam.com/video/dI6HNi5I8d4/v-deo.html
Enjoy!
-Roman
I'm here from economics class Lol
It's Vape Nate dudes
Same Nate.... Mr. Mckeen has really got us doing an essay on the first day back. Fun :)
Thanks
Business people's use Economic regression period to buy stocks and shares if they try to buy them in Economic depression time means will it be more cheaper?
Muralikrishnan R stocks value is affected negatively by depression... however you have to understand that there is depression with high inflation or with high deflation
INTEREST RATE SUPPRESSION.... Ironic how we claim to practice 'free market capitalism' when the most important price in an economy (the price of capital) is centrally planned all over the world. The federal reserve artificially suppressed interest rates in 1924 to help Great Britain get back on a gold standard. They then proceeded to back off the interest rate suppression in 1928... Coincidence?
I know what living in a Depression is like. 🙃
Que buen history class :)
Keynes fatal error, not understanding Says Law. Aggregrate supply = Aggregrate demand.
AWESOME!
I am sure the creation of the fed in 1913 had nothing to do with this ?
Zohaib Hameed
In my Austrian viewpoint it only created the bubble in the first place.
It can’t be debated that the Fed’s actions causing massive deflation was the straw that broke the camel’s back.
MOAR ON GRATE DEPRESSION PWEASE
Was it possible to save the economy from the great depression by printing more currency notes and then supplying those new notes in the economy ?
Faisal Farooqui Printing currency would increase inflation, causing a burden on forex reserves in long run. Not viable
Daniel Joseph ok Thanks for your answer
I disagree with the main premise. First of all, inflation was very high in the 1920s because credit consumption did not permit prices to fall even though the period was one of high capital investment and great productivity increases. The monetary inflation created malinvestments that had to be liquidated in the future. When the malinvestments were liquidated, the economy should contract as it did. What made the correction a Great Depression was the huge expansion of government and the regime uncertainty that Hoover and FDR introduced. (See Rothbard and Higgs on this explanation.) The high taxes, tariffs, and regulations also added to the problems but without the massive increase in Fed-created credit from 1924 to 1929 there would have been no artificial boom and no need for the bust that followed.
The problem of this video is that it quite doesn't explain the GD: it only covers (well) what made it worst after it had already started, that is, what converted an already existing crysis to the greatest of them all. I hope down the series the starting causes of the crysis will be explained.
I think it would be great to have a video about the recovery of 1933 due to the dollar devaluation, gold clause ban, and leaving the gold standard.
Why was the money supply reduced initially if there was 0% inflation?
more money = Inflation
1:04 He said inflation was 0%, and then the stock market crashed because the money supply was reduced. I investigated it though. Apparently the central bank was worried about the stocks being overvalued, and they wanted to reduce their price on purpose. But in reality, the stocks were indeed rising a lot in price, but production and revenue of the companies of said stocks was also rising a lot. The central bank tried to correct a problem that was not an actual problem. This was the first of several mistakes that led into the great depression.
What I don't understand now though, is why there was 0% inflation.
Got it: fee.org/articles/money-in-the-1920s-and-1930s/
0% = less price increase of goods in services...It means the price is the same for at least a year...they a video about that to explain it...
Rothbard disagrees.
Is that a Bitcoin tie?
I'm scared it will happen again
ur da best
Okay I feel sad now 😔
The couse of the depression was not lack of money, it was to much speculation with cheap loans given by the fed.
This is some Kaynsian logic, and the US will do it again within 10 years.
We are all at the mercy of the federal reserve.
The moment the federal reserve bank decides to massively contract the money supply is the moment the federal reserve has sentenced a lot of people to death, or at the very least destitution.
I thank you for preparing me to face the federal reserve and for me come out the victor.
he didn't go that far explaining who really caused the bankruptcy and how the banks took control over congress and Roosevelt..
So basically it was a horrible response to the great depression that made it so bad
From what I read in these comments , ha ha ha I have to wonder as to what our schools have been teaching people .
Pretty terrible, why weren't things so bad in other countries? You model doesn't explain anything, nor help to plan for the future.
What I find interesting is that over 90 years after the start of the Great Depression, we still have arguments over what caused it and what cured it. And here we go again, we are currently faced with at least a major recession or a depression and we can argue again over how best to deal with it. There doesn't seem to be a solution that we can all agree upon.
That's completely incorrect. Inflation doesn't make things worse. It is the one breath the economy gets and it cushions the fall. Ever tried stagflation?
Stagflation is caused by high inflation and low employment. Inflation is a key problem of stagflation you r word.
Keynesianism 👎👎
it's funny because the video didn't show any keynesian idea
+1
@@fernandor4617 yes it did. They discuss aggregate demand and aggregate supply. Both ideas that are unique to Keynesian analysis….. but not necessary for real economists to do real predictions. Only useful if you are a salesman for government printing.
Instant unsubscribe. Thanks Keynes, but no thanks.
Why? They don't advocate keynesianism in any way.
that was mostly friedmans theory with a few others that almost entirely centered around govt failures
Dimitri Andreou Oh, a child who doesn‘t want to listen to a opinion he might disagree with. Snowflake.
Capitalism fucked up... Keynes saved the day with democratic socialism.
Capitalism didn't fucked up, it was socialism that fucked up. All the interference by the government made the great depression what it was
soumyadeep bidyanta, Shut the fuck up. Keynes was a Malthusian and a Marshallian and nothing else.
What do you think of Friedrich Hayek ?
JudeTubeHD It was laseizz faire before the Great Depression. This is not a debate.
The Great Depression was the result of a contraction of the money supply. If the Fed wasn't so incompetent, it would have never been a problem.
Can you please answer the following questions
1.Why is there no inflation in those time?
2.What are the bad effects of deflation?
Deflation is bad because it makes the dollar valued more. He actually explained this in the video.
If I owe $10 dollars in debt, but the inflation rate is negative, then that means I have to work more hours to pay the debt off. So, I have to decrease my consumption.
The creditors didn't increase spending enough to offset the decrease in consumption.
very good video!
Vengo departe de Celia