A 1931 soup kitchen in Montreal feeding unemployed men
A depression is a long period of time in which the economy of a country is not working well. It is usually marked by a large number of people being without jobs. A depression is a more severe kind of recession.[1] A depression can last for several years.[2] In addition to high unemployment, depressions hurt banks, trade and manufacturing. Prices fall, credit is harder to get and there is an increase in bankruptcies.[2]
A depression in one country can quickly spread to other countries. For example the Panic of 1873 started in Vienna and spread to other parts of Europe and to America, bringing what was called "the Great Depression" until a worse one came in 1929.
The Great Depression
The Great Depression (1929-39) was the longest lasting and deepest economic depression in the history of the modern industrial world.[3] It started after the U.S.stock market crash in 1929.[4] The prices on the Wall Street stock market fell from October 24 to October 29, 1929. It sent Wall Street into a panic. Millions of investors were financiallyruined.[3] By 1933 nearly half the banks in the United States had failed and between 13 and 15 million Americans were unemployed.[3] The beginnings of World War II in Europe ended the depression.[3] The Great Depression affected countries worldwide. Unlike previous depressions in which a few countries were hurt, the Great Depression was felt by nearly all industrialized countries. Africa, Asia, Australia, Europe, and North and South America all suffered. Countries tried to protect their own economies by raising tariffs on goods they imported into their countries. This caused world trade to fall by some 30 percent. An estimated 30 million people were unemployed worldwide by 1932.
As of 2013, some countries in Europe were suffering greater unemployment than they did during the Great Depression of the 1930s.[6] The Gross domestic product has been shrinking faster than some European nations can cut spending.[6] Europe's financial crisis shows every sign of getting worse, not better.[7] While called a recession by some government officials, economists are already calling it a depression. As European countries are locked into the Euro they cannot devalue their own currency to adjust their economies.[6] This means they cannot lower the price of their exports to make them more attractive and so cannot achieve a balance of trade.[6]
