Summary: “what can we learn from the Depression?” All economists in the word can’t estimated and avoid the calamity of economic great depression in early 1930. Economist always questioning “why this calamity had crush on us” so they want to learn why this calamity is happening. However it’s not an easy way to learn about the causes of this calamity. Actually this great depression has many differences influence between one country and another. Therefore according to this calamity many countries encounter the downfall of GDP. Many people had been tricked by their own mind so they believe the cause of this depression is Wall Street crash. But the economist said that the real issued of this depression is a downward path of the epicenter from global trading money and the industrial revolution in Germany and English. Many economic historians now are searching a false truth about the real reason of the cause for this economic collapse. Finally they found the solution of this problem, and the solution is to fixed value of gold, and it’s known as “gold” standard. But it’s not stand to long because of the effect from world war one. The gold standard system it’s seem to be very ordinary system, but when the war came this system find that they are going to fall down in the deepest valley. According to that problem many countries experience about bankrupt. But some countries like America manage to escape this problem, so to find the solution this problem they make the America to be the center of gold standard. Because of this calamity many people had drawn some lesson like to of overturning money crisis and to avoid the same global financial meltdown. However not every countries take a good lesson from the great depression especially the countries in Europe. Because in Europe they have their own fixed exchange rate that similar whit gold standard but the higher level of financial integration in Europe take much riskier prospect than the gold standard system. In Europe they had a central bank which gold standard system lacked. In the end perhaps economist can make better solution for this calamity if they are not stuck in their mind only for one false truth, therefore they can take more lessons from disaster and not wasted time for unimportant effect like GDP downfall or etc.
Posted on: Tue, 03 Dec 2013 16:14:47 +0000
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