Homework SourseExplain how the current economic recession differs from the
Solution
The Great depression was worldwide. It was due to the collapse of the international financial system It also resulted from the mutual adoption by many countries ( including USA) of high-tariff policies, which were intended to keep out foreign goods in order to protect domestic producers. The policies were called \"beggar thy neighbour\" strategies since they attempted to \"export\" unemployment by improving one country\'s trade position and hence demand for its goods at the expense of its trading partners And , of course, if each country keeps out foreign goods, the volume of world trade declines, providing a contractionary influence on the world economy
Almost every country suffered a deep recession in the 1930s, but some countries did better than USA Sweden began an expansionary policy in the early 1930s and reduced its unemployment relatively quicker Britain\'s economy suffered high unemployment but in 1931 it went off the gold standard and the ensuing devaluation of the pound sterling set the stage for some improvement. Germany grew rapidly after Hitler came to power and expanded government spending. China escaped the recession until after 1931, because it had a floating exchange rate.
In 1938, real GNP in US rose above its 1929 level for the first time in the decade, but it was not until 1942 , after the US formally entered world war II , that the unemployment rate finally fell below 5%
The experience of the US in the early 1980s- the worst recession since the Great Depression, casts doubt on the optimistism of recovery. During the 1980s, the US experienced the largest sustained budget deficits in its peacetime history. Even so cutting spending or raising taxes was not politically popular. Gradually, in the 1990s, the deficit began to be brought under control, and toward the end of the decade the budget swung into surplus.This was due to raising the prices and government spending.
By,
Nishant Bhatt
