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The global economic downturn known as the Great Depression lasted from 1929 to 1939. It began with the Wall Street crash of 1929 in the United States and spread worldwide, producing extremely high unemployment and poverty, sharp declines in industrial production and international trade, and widespread bank and business failures. The downturn was preceded by the “Roaring Twenties,” when rapid growth and speculation (including in stock markets) helped build financial fragility through wealth inequality and weak banking regulation. After spending fell and confidence collapsed, stock values dropped dramatically from late 1929 into 1932, with the United States reaching unemployment around 25% by 1933 and thousands of banks failing. The Depression’s severity and timing varied by country, influenced by factors such as currency policy, exposure to trade, and responses by governments and central banks. Protectionist measures—especially the U.S. Smoot–Hawley Tariff Act—contributed to a collapse in global trade through retaliatory tariffs. The gold standard also acted as a transmission mechanism, spreading deflation internationally and discouraging recovery; countries that left the gold standard earlier generally recovered sooner. In Germany, heavy dependence on U.S. loans and the ensuing crisis drove unemployment toward nearly 30% and helped fuel political extremism, contributing to the rise of Hitler’s Nazi Party in 1933. Recovery began in most countries around 1933, though not uniformly, and the Depression effectively ended with the economic stimulus of World War II in 1939.
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The Great Depression caused unprecedented unemployment, widespread poverty, and a sharp collapse in industrial production between 1929 and 1939. Worldwide GDP fell by an estimated 15%, while industrial output, personal incomes, prices, profits, tax revenues, and international trade declined substantially. Cities dependent on heavy industry were especially affected, construction nearly stopped in many countries, and rural communities suffered as crop prices fell by as much as 60%. Unemployment reached about 25% in the United States by 1933 and nearly 30% in Germany, while some countries experienced unemployment rates as high as 33%. Bank and business failures worsened the crisis by destroying savings, restricting credit, and reducing investment and consumer spending.
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