The Great Depression

序列号：＿＿ 课 程 论文 课程名称 __英美文化概况_______ 题目名称 _The Great Depression_ 学生学院 _材料与能源学院_______ 专业班级 _高分子材料与工程10x班_ 学 号 __31100070xx__________ 学生姓名________xx___________ 指导教师________xx___________

2012 年 06 月 08 日 The Great Depression Abstract: The Economic crisis called The Great Depression which began in 1929 and ended in 1933 is an unprecedented sever economic crisis and so far it is still considered as the most serious one in America history, for it was the longest, most widespread and deepest depression since the earth formed. Through the study of the great depression and sum up experience can help us to recognize the current grim and complex economic situation, avoid a similar fate.

Key Words: Great Depression, Sum up experience, Avoid similar fate 1. Introduction For most people, the American economy has reached unprecedented development level and it represents a kind of prosperity in the 1920s. However, Prosperity lurked behind many of the old order in crisis. In 1929, stock market crash and all the great depression began to break the fantasy of eternal prosperity owned by the American people. At that time, About 200 million Americans wandering around - of which there are more than 250,000 in 16 to 21 years old. These at that time was known as the Great Depression of the "no one to depend on drifting", “air-to-air deal with the tenant farmers”. A large number of university graduates can’t find a job. There are suddenly unemployed middle-aged men with a helpless facial expression who go every day, of no fixed abode. There have a funny saying to describe that period: “Mellon pulled the whistle, Hoover rang the bell, Wall Street gave the signal and the country went to hell”.

2. Policy error is the main cause of depression 2.1. Monetary policy mistakes First, from the 1929 first quarter, the Federal Reserve began tightening monetary policy to curb excessive speculation, and it continued for two years. Applying this policy is too harsh, the economic situation has deteriorated significantly in September of that year. Significant reduction in both manufacturing industry and in the construction industry, seriously affecting the United States main index of industrial shares. But the entity economy decline responded in the stock market, eventually United States general breakdown of capital market. Second, when a crisis occurs, the Fed did not expand the money supply to enhance the liquidity of the market, with the result that a large number of bank failures. Furthermore, the Federal Reserve lacks the correct appraisal to the monetary policy efficiency. 2.2. Fiscal policy problems First of all, in the unit after the collapse, Hoover administration sought to stop companies relying on a significant reduction in wages to maintain profits. Next, enhances the tax revenue for the realization balanced budget goal. However, the most direct and effective fiscal policy to stimulate the economy should be to increase government expenditure and reduce taxes. 3. Franklin Roosevelt's New Deal to save the United States After the Roosevelt government came on stage has carried out a series of new deals, saved the United States in the edge of the economic collapse. 3.1. Saved the financial industry, restore the bank credit system First of all, in March, 1933, the Roosevelt government announced the national bank is on leave 3 day, Government over the Federal Reserve directly to intervene in the troubled financial sector. Secondly, the regulations limited the interest rate ceiling in the 1933 Banking Act, eased the excessive competition among commercial banks. Finally, through compulsory measures to enable domestic gold back to financial system and raise the price of gold to boost market liquidity, promote exports. 3.2. Expansionary fiscal policy to stimulate economic recovery. On one hand, by vigorously promoting the construction of basic facilities, increase the investment in fixed assets to ease the situation of insufficient effective demand and excess supply of labor. On the other hand, the government took temporary relief for the unemployed. 3.3. To support the development of industry and agriculture 3.3.1. In agriculture In order to ensure agricultural prices, the government issued The Agriculture Law to limit the output of agricultural products and reduce cultivated land area. 3.3.2. In the industrial sector The implementation of the National Industrial Recovery Act created employment opportunities for more people, increased their purchasing power, eliminated unhealthy competition among enterprises, so that existing industrial productivity are fully utilized. 3.4. The establishment of social security system The Social Security Act enacted in 1935 is the United States’ first-ever legislation on social security issues. The establishment of social security system, fundamentally solve the people's worries, enhanced consumer confidence, expanded consumption demand strongly, conducive to social stability through economic hard times. 4. Several enlightenment learn from Great Depression 4.1. The lessons should be learned from the great depression Financial innovation should pay attention to financial risk prevention. Technology innovation and the industrial revolution brought United States prosperity in the 20s of the last century, but there is a contradiction of rapid development and the sharp decline in the demand for labor productivity. 4.2. The experience accumulate from great depression Application of economic policy intervention in the economy are critical to the operation. President Roosevelt abandoned the traditional concept of free economy, and advocated government intervention in the economy, used the aggressive expansion of fiscal policy to stimulate economic recovery and took a drastic reform in financial, agricultural, industrial and social security aspects. Franklin Roosevelt's New Deal, though cannot completely eradicate capitalist economy ill, but saved the American from the edge of the economic collapse. So, for a market economy country, the Government should actively intervene and guide the economy, to take strong measures to guarantee economic development in a healthy and stable direction when