What was the main cause of the Great Depression?

Posted by: 1Historygenius

What caused the Great Depression?

19 Total Votes

The Unregulated Free Market Economy

This theory was primarily proposed by John Maynard Keynes and argues that the because the economy during the Roaring Twenties was left unchecked, the stock market crashed after much speculation and excessive growth. FDR's New Deal (1933-39) pulled t... he country out of it while Herbert Hoover (1929-1933) stood idle. The most popular leader of this interpretation today is Paul Krugman   more
9 votes

Other and Explain

6 votes

Fed's Easy Credit during 1920s

This theory is most popular among the Austrian school of economics proponents like F. A. Hayek. Rather than the natural cycle of booms and busts the monetarists believe in, Austrians believe this is not natural and is caused by the Fed's manipulatio... n of interest rates. They argued the easy money policies during the Twenties caused the crash and interventions in wages, prices, and taxes by both Hoover and FDR made the situation worse. The most popular leaders of this interpretation are Ron Paul and Peter Schiff   more
3 votes

Fed's Contraction of the Money Supply

This theory was primarily proposed by the monetarist economist Milton Friedman. This terry argues that the a Federal Reserve reduced the money supply when it should have expanded it. Because the economy was not inflated enough (1930-31) the economy ... collapsed from what could have been a simple downturn when the Fed cut the supply (1932). FDR's New Deal was not as successful as people thought. The most popular leader of this interpretation today is Ben Bernanke   more
1 vote
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