Sample Economics Paper on Analysis: The Great Depression

After Robert Hoover was elected the president, people had hope in him he would revive the
economy. Considering his strong managerial skills in the corporate world, he was perceived
to be the best person to revive the economy (p.1002). The change started to be experienced in
1929 when most Americans became fully employed and received salaries that had never been
paid before. During his first year in office, people felt the effect because the treasury
secretary Andrew W. Mellon reduced tax, which made people get more money in their
pockets. Hoover saw the danger and started warning investors to be more cautious. The stock
market was made easy and flexible, and this allowed many people to invest in it. However,
buying on margin was not to last for long before the effects could be felt. Due to a lack of
regulations in the stock market, the stock price declined, although brokers could sell the stock
at a lower cost to cover the loan. Although no one was concerned about it, the stock price
kept rising because people were earning on better terms (White, E. N. (1990).
By 1927, the economy had signified some weaknesses. For instance, the production of
steel, construction of residential and automobiles were declining. This was also similar to the
rate at which the consumers were spending. Come mid-1929; there was a sharp decline in the
stock market. Also, employment, industrial production and other economic activities were
sharply declining, and at the same time, the stock market was still rising. By early September
1929, there was a drastic fall in the stock market. The world exchange was not spared also
because it had experienced a sharp decline by mid-October the same year. The collapse of the
stock market became severe and lasted long, making it referred to as the great depression
(Beaudreau, B. C. (2004). The great depression was therefore caused by economic distress
(p.1004). However, the collapse of the stock market never caused the great depression. But
instead, it revealed that the economy of the 1920s was founded on a fragile basis. F. Scott
observes that the prosperity of the 1920s was an age of plenty that was short-lived and could
not last.

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The collapse of the stock market also created psychological panic, which affected
economic growth. In fear of losing, people swiftly withdrew their money from the stock
market and banks (p.1004). This move made matters worse, and by 1932, more than 9000
banks were shut down, and the economy experienced an alarming collapse. The cause of the
great depression was the factor of overproduction but less consumption. For example,
manufacturing production experienced an increase of about 43%, while consumption-ability
could not increase with such a rate. The impact of the great depression was global. People
lost their jobs, and looting and rioting started in many parts of the world due to this economic
pressure. For example, in 1932, farmers could not pay their mortgage, and sheriffs were on
their necks. Due to these frustrations, they formed The Farmers Holiday Association to front
their case to the government (p.1007). Also, the government policies highly contributed to the
great depression. Such procedures included raising tariffs on imported goods, raising tariffs
on agricultural products, among others. Hunger was looming everywhere, and school children
suffered from it; many people became homeless because they could not settle their
mortgages. As desperate times call for desperate actions, the rate of crime, domestic violence,
begging and prostitution escalated. Life was tough for African Americans to bear, and every
person struggled to survive (Elder, G. H. (2018).
In conclusion, the great depression was man-made; the poor policies made by the
people in power can change the state of the world. The depression was not fostered, and the
leadership was working to ensure that people had money in their pockets. However, the poor
policies and the stock market's collapse led the world to a period of reckoning. Although a
country may think its problems are for its people, this thought was annulled by the great
depression. This is because the impact of the collapse of America's economy affected the
whole world. In the future, countries in the world should always consider coming together to
form policies that will govern the stabilization of the world economy.

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References
Beaudreau, B. C. (2004). Mass production, the stock market crash, and the great depression:
the macroeconomics of electrification (Vol. 175). iUniverse.
https://books.google.com/books?hl=en&lr=&id=iiTKp8WtDkC&oi=fnd&pg=PR10&
dq=Beaudreau,+B.+C.+(2004).+Mass+production,+the+stock+market+crash,+and
+the+great+depression:+the+macroeconomics+of+electrification+(Vol.+175).+iU
niverse&ots=ebeVO2zmVP&sig=0_jDl8djVGAv9pw268wmIF4e3VA
Elder, G. H. (2018). Children of the Great Depression: Social change in life experience.
Routledge.
https://www.taylorfrancis.com/books/mono/10.4324/9780429501739/children-great-
depression-glen-elder
White, E. N. (1990). The stock market boom and crash of 1929 revisited. Journal of
Economic Perspectives, 4(2), 67-83.
https://www.aeaweb.org/articles?id=10.1257/jep.4.2.67