Question

Comment on the relationship between 1920s-1940s economics and today's economic conditions. Are there any similarities that you notice? Any key differences?

Answer 1

Economic condition between 1920 to 1940 was related to an economics phase of downturn which was triggered by the social factors and mismanagement of the global economy and it was also related to high civil unrest and World wars, so, turbulent time periods only have similarity with the current time in terms of economic downturns as, at the current periods there has been a fear of an impending reception due to fear of coronavirus and economic activities which are completely shut down.

Another relationship could be that Federal Reserve is trying to stimulate the demand into the economy by cutting down onto the interest rates and at those times also, Central banks had to cut down the rates in order to stimulate the demand in economy.

When we are looking onto the differences between the the current phase of economy and economy between 1920 and 1940 then, this economy is highly globalised and the risk and reward are are properly shared between various Nations whereas at those times, the recessions majorly implicated fewer economy and mostly United States and it can also be said that there has been a significant improvement on the economic front by central banks being proactively reactive to such economic downturns, whereas in 194, there was hardly any proactiveness and they were mostly reactive to any kind of economic downturn.