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Causes and Policy Responses of the Great Depression and the Financial Crisis of 2008: A Comparison

Journal: International Journal of Science and Research (IJSR) (Vol.8, No. 7)

Publication Date:

Authors : ;

Page : 1728-1730

Keywords : Financial crisis 2008; Great Depression;

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Abstract

This paper does a comparative analysis of the causes and policy responses between the Great Depression of 1929 and the Financial Crisis of 2008. The Great Depression in 1929 originated from a stock market bubble burst and a subsequent rise in interest rates due to the Federal Reserve�s contractionary monetary policy. The Financial Crisis of 2008 was on the other hand, caused through a real estate bubble burst that escalated with the creation of subprime mortgage backed securities. The Great Depression spread throughout the countries that had been maintaining a strict adherence to gold standard. The Financial Crisis transmitted outside the United States through the process of securitization. A series of monetary and fiscal policies and banking reforms eventually helped overcome the slowdown in economic growth caused by these two financial crises.

Last modified: 2021-06-28 18:20:06