Post #28 by Aussi on the Macroeconomic Trends and Risks board

Personal Finance Topics / Macroeconomic Trends and Risks

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Regarding the Great Depression and government response, compare that with the Depression of the early '20s. The Great Depression was exacerbated and extended by price and wage controls and by FDR's confiscating everyone's privately held gold, not by spending per se, and the markets merely reflected that.

The depression in the early 1920s lasted about 18 months. FDR became president after the depression had been going on for about 36+ months, so I am unsure what actions FDR made that extended the depression longer than 18 months. Following is how real GDP changed over the early 1930s.

1930 -8.5%
1931 -6.4%
1932 -12.9%
1933 -1.2%
1934 10.8%
1935 8.9%
1936 12.9%
1937 5.1%

It is difficult for me to see how coming off the gold standard in 1933 prolonged the depression.

Craig

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