The Great Depression and Government Response Research Paper

The Great Depression and Government Response - Research Paper Example Despite the fact that the depression had taken its roots in the United States, it rapidly spread to other industrialized countries across the globe and had a devastating effect on output and employment levels. The cultural and social effects of the great depression were also profound, requiring an immediate response from the governments to adopt various expansionary macroeconomic policies. Research proves that in the US, the great depression ranks as the second greatest crisis after the civil war. Regardless of the fact that the causes of the depression still remains controversial, a combination of such factors such as poorly regulated markets, consumer debt and the shortage of high growth industries created a recessionary business environment, leading to low investment confidence, reduced spending and a high level of uncertainty. What is important to understand here is how and why the Great Depression is credited with the evolution and development of macro-economics as a distinct fi eld. It is felt by many scholars that it is the Great Depression that gave birth to macroeconomics as a separate and distinct field(Hamilton, 1992). To some extent it is thought by many that to this day, the Great Depression continues to influence the beliefs and policy recommendations of macroeconomists. It would not be incorrect to say that many of the contemporary systems of regulating banks and the Wall Street have been developed keeping the lesson learnt from the Great Depression in mind. In fact, macroeconomics gained attention after the Great Depression since it helped highlight all the main flaws that occurred in applying theories of microeconomics to the economy. According to the micro economists, the high level of unemployment that followed the Great Depression should have been regulated by Adam Smith’s â€Å"invisible hand†. According to this theory, workers should have revised their expectations of their wages downwards to the extent where firms would be wi lling to hire more people. However, what actually ended up happening was that because of the poverty and unemployment, demand for products dropped and so firms did not require additional workers. Moreover, since the workers were not willing to accept considerably lower wages for the same jobs as before, the wage rates were prevented from lowering to a more appropriate level. CAUSES OF THE GREAT DEPRESSION The causes of the Great Depression are still subject to debate and argument by various economists. One school of thought is that the onslaught was demand-driven, that is, the aggregate demand declined. However, many economists believe that the tight monetary policy of the US government, which was aimed at limiting the stock market speculations, played a major role in the occurrence of the depression. The 1920s did not witness any exceptional boom. The prices remained constant except the stock prices which rose fourfold from exceptionally low in 1921 to extremely high in 1929. In th e last two years of the decade the Federal Reserve had to resort to increasing interest rates in the hopes of slowing down this boom. The higher rates depressed the spending on interest-sensitive areas like automobile and construction. Towards the end of 1929, the stock prices had reached unprecedented heights (Kindleberger,

Text and Traditions Final Take-Home Examination Term Paper

Text and Traditions Final Take-Home Examination - Term Paper Example These lines inform that Wieder was in such a helpless state as was Jonah. He has nothing to do but act as destiny wishes him to do. His appearance is narrated as a â€Å"thundering reappearance† that is also indicative of his association with biblical figures or some Greek hero. The narrator explains each and every detail concerning Wieder as someone witnessing everything with his own eyes. Wieder is a poet for sure, as with his performance in air; he also shows his taste in poetry. Like Elizabeth Bishop, Wieder’s poetry is also about death and fascination with the idea of death. Wieder initially says, â€Å"Death is friendship†, which is informative of the idea that for Wieder, death is not a destructive force but something that causes ease for a being due to which, he calls it friendly. Later on, he attaches death with Chile, as he says, â€Å"Death is Chile†. He writes these words after seeing life in Chile. Life is not that much persuasive for him to make him understand that life is friendship or life is Chile but the idea of death dominates his mind. After writing about death and Chile, he sees the city as a picture that is torn into pieces. For him, there is no life in anything. Everything that he sees makes him to remember death. In his last round of the plane, he writes, â€Å"Death is responsibility†. Here, he feels that death cannot be attained so easily, there are certain responsibilities of a person that he has to fulfill before embracing death as a friend. Wieder is a poet and a sensitive person as explained by the narrator. He is also a performer. Wieder’s profession, that is his being a pilot and his passion for poetry, are two quite different fields, which are attached by Wieder by making use of skywriting. Wieder shows his passion of poetry by writing on the sky and making people to read his verses through his professional training of flying. In the paragraph, the whole picture and scene of the whole