2. Economic and Financial Collapse

About this Lecture

Lecture

In this module, we think about the key features of the Great Depression, focusing in particular on: (i) the fundamental interconnectedness of the economy: the rise in unemployment resulted in a decrease in demand for cars (since unemployed people don't want to buy a new car), which created difficulties for car manufacturers, which created difficulties for manufacturers of car parts, etc. (ii) the extent to which deflation is self-perpetuating: people expect prices to continue to fall so don’t spend money on goods and services, which causes prices to fall, etc.; (iii) the difficulties faced by the banking sector in this period; (iv) the reason that the banking sector in the United States was so fragile; (v) the extent to which the Federal Reserve found itself trying to fulfil competing objectives: supporting the banking system (which required lowering interest rates) and protecting the value of the dollar (which required raising interest rates); (vi) the impact of the long delay between Franklin D. Roosevelt being elected President (in November 1932) and when he was actually sworn in as President (March 1933); and (vii) the state in which Roosevelt found the banking system when he became President.

Course

In this course, Professor Peter Fearon (University of Leicester) explores the economic downturn and financial crisis in the United States in the period 1929-33. In the first module, we think about the origins of the economic downturn, including the Wall Street crash of October-November 1929. In the second module, we think about the key features of the economic and financial collapse, focusing in particular on the collapse of the baking sector, before turning in the third module to consider how the crisis played out for people living in farms and rural communities. Finally, in the fourth module, we think about support networks were available for those caught up in the Great Depression.

Lecturer

Professor Peter Fearon is Emeritus Professor of Modern Economic and Social History at the University of Leicester. His research interests centre on economic change in the United States in the 20th century, agricultural history of the mid-West in the 1920s and 1930s and the New Deal economic and social policies.