Question

the difference or similarities between the 1930s Depression and the Financial Crisis of 2008

Answer 1

Differences between depression of 2008 and 1930-

A. depression of 1930 was not just related to economic downturn but it was also related to social unrest whereas depression of 2008 was mostly related to the mismanagement of the economy.

B. 1930 recession is often associated with the culmination of a long-term debt cycle whereas 2008 recession was result of mismanagement of risky instruments and housing sector.

C. 1930 great depression is often categorised by civil war whereas 2008 recession is generally associated with the mis management of the derivatives market and the real estate market.

D. There was a long term bear market after 1929 which almost existed in 1936 whereas 2008 recession was managed significantly by the federal reserve and it did not last longer.

Similarities between depression of 2008 and 1930 are as follows-

A. There was a financial contagion and collapse of various institutions due to both the crisis of 2008 as well as 1930.

B. Central banks has to step in respectively in 2008 and 1913 order to contain the crisis and take aggressive measures

C. There was widespread unemployment and low economic growth as well as global spread of recession due to collapse of the United States economy in both the cases.