What were the long-range effects of The Great Depression

This article will explain what were the long-range effects of The Great Depression. For that, the article will explain what The Great Depression was, what causes, and how it affected people’s lives. 

What was The Great Depression? 

The Great Depression was the period in which the economy had a major downturn. It started with a regular recession in the American economy, through the summer of 1929. But in October 1929 the Stock Market crashed, and the recession turned into The Great Depression.

It went on until 1939 and was the most severe economic depression the Western world had ever experienced. It caused huge changes in the economy, macro politics, and in everyday life of people that lived through it. 

The Great Depression brought to people living that period high rates of unemployment, increased poverty, and acute deflation. Aside from that, the American Gross Domestic Product (GDP) went down 30%. Let’s discuss what were the main causes of The Great Depression. 

What caused The Great Depression? 

The fundamental cause of The Great Depression was the decline of spending. When people spend less money, the industry will need to produce less, increasing what they have in storage. 

Because people perceived that the economic situation was declining, they also rushed to the bank to get their money out of there. Causing the banks to have less money to loan, and people that had loans, because they were probably unemployed, couldn’t pay back their loans. 

What happened was that the economy was in full power during the early 1920s, people were buying stocks, and this high demand caused them to raise their prices beyond what was normal. When their value started to fall, around September 1929, people started selling them causing the market to collapse. 

The Great Depression spread worldwide due to the gold standard, which linked planets all over the world in a network of currency exchange rates. 

How did it impact people’s lives?

The Great Depression had many effects. It had effects on macroeconomics and politics. But it also had a huge impact on the lives of everyday people. The standard of living became lower almost instantly. 

The unemployment rate went up around 25%. Because of all that, people lost faith in the economic system, and people’s expectations of the future. Many homeless families looked for shelters. 

It was a period that marked people’s lives, many teenagers became drifters, many weddings were postponed. It also affected the birth rate, which became lower, and the children that were born had to take on adult responsibilities quite fast. Women, when they could find a job, would go to it, as a way to help the family income. 

But aside from these effects in people’s lives, in Europe, The Great Depression caused a huge change in the political climate that had a long-range effect. Let’s discuss what they were.

What were the long-range effects of The Great Depression? 

The Great Depression had a lot of economic consequences, especially in America. But it also opened the door for things that would change the world completely. In Europe, which also experienced some economical difficulty, The Great Depression made for the perfect storm to some ambitious plans.

Adolf Hitler saw in this period of huge economic mistrust, and loss of faith, the opportunity to make himself heard. The same happened in many countries in Asia. Fascists used this opportunity to seize power. 

So The Great Depression, although it impacted most countries in the world, it affected them differently. While America was dealing with its first huge economic crises, and how it affected the social cultures, which were all shown in books of the period. 

The rest of the world was dealing with the political changes, the possibility of war ahead, and the growing presence of totalitarian governments. And even though America wasn’t worried about that, it came knocking on their door soon enough.

Many people fled Europe to America to escape the horrors of totalitarians. Especially writers, artists, scholars, intellectuals, and filmmakers. This caused America and specifically  New York, and California as the hub for artists around the 1930s. 

The Great Depression also had an impact on how people dealt with money. People learned the importance of financial security, when it is important to save, and how to endure hard times to survive. 

Along with that, it made Americans rethink when compared to what was going on in Europe and Asia, the importance of democracy. It also made many of them look to Marxism to explain what had gone wrong with capitalism.

All of this shows how The Great Depression, although it started with a crash in the United States of America, affected the whole planet. And not only in an economical manner. Through that, it stabilized a new world order, changed the political scenery, and in the big picture, also led to The Second World War.

Being aware of all of it happening is extremely important so people understand how democracy and economic well-fare are here, but they can get lost quite fast. Governments and people should always be aware and vigilant to avoid those sorts of crises from happening again. 

This makes people better equipped to handle their country’s politics, elections, and even everyday decisions about their finances. 

Frequently Asked Questions (FAQ): What were the long-range effects of The Great Depression? 

What were the countries that were worse hit by The Great Depression?

Aside from the United States, where The Great Depression had started, the countries that were affected the most were the ones that had the closest contact with Americans, especially the ones that were in debt with them, like some of the European countries, such as Germany and Great Britain.

Those countries were in debt with banks all over the United States since they had made loans to reconstruct the countries after World War I. As many banks went bankrupt or started to collect their debt, and they couldn’t loan money anymore, those countries started to feel a sharp effect of The Great Depression.

In Germany, which needed not only to rebuild the country, but to pay for the reconstruction of others, the unemployment rate skyrocketed by late 1929, and in 1933 there were 6 million people unemployed, meaning 25% of their workforce. 

As for Britain, it was most affected because it was a country that exported many goods. And once the other countries were all going under, they couldn’t buy what Great Britain was put out to sell. This continued up until the beginning of World War II.

How did The Great Depression affect health care?

Back in those days, there were no health care policies, and insurance for health care was almost non-existent. So when The Great Depression hit, people could get sick, but they would have no money to go to a doctor or to pay for a hospital. 

As a consequence of that, many hospitals and clinics closed, they went into ruin. They couldn’t get new patients, and the ones that were there most likely didn’t have the funds to pay for their health care since unemployment was so high. Be sure of the shortage of credit, hospitals also couldn’t go to banks to get a loan. 

What was The New Deal? 

The New Deal was a series of public programs that were created to reduce the effects The Great Depression had on the American economy. It focused on public work programs, financial reforms, and regulations, and it was created by President Franklin D. Roosevelt between 1933 and 1939. 

The main focus of the new deal was to offer relief to the many unemployed at the time, so the poor could go back to their standard of living. For that, they would be hired by the government to work in building many public buildings, such as libraries, airports, and sometimes even build entire cities. 

This was supposed to set the economy back to its prosperous period before The Great Depression. Along with that, the new deal focused on creating better rules for the financial system to prevent that sort of crisis from ever happening again. 

For example, it was set that banks would need to have insurance so they would always be able to pay back their clients. From the new deal also came many of the labor laws that prevented people from becoming unemployed without any insurance. All of that was the way that Americans four the way out of The Great Depression.

Who were hobos during The Great Depression?

Hobos were common during The Great Depression. They were people that would walk around the country looking for job opportunities. It is known that around 4 million adults had to leave their homes to try and find shelter and food because of The Great Depression, so these people would try to find it anywhere they could.

They would do any work that was asked of them, for any period. It is believed that 250 thousand of those people were teenagers, showing how many lost their younger years, and became responsible all too soon for providing and helping their families. 

Food Shortage was such a big problem back then that the hobos would beg farm owners to give them food. And if one did give it, the hobos would mark their house, so other hobos would know that this farmer is willing to give food. 

How did The Great Depression affect Brazil?

Even though Latin America wasn’t as impacted by The Great Depression as America and Europe, it still suffered its consequences. In Brazil, for example, a nationalist government was put in power, the same way it would be seen in other countries around the world, like Germany. 

In Argentina, many economic changes to cope with what The Great Depression had caused. The Latin American countries that were hit the worst were: Brazil, Cuba, Chile, Mexico, and Peru. 

Brazil was hit hard between 1929 and 1932. The country was a great export of coffee and saw it fall by 50%. The country also lost much of its foreign investment, and as a way to not reduce the coffee price, even more, the government ordered that a huge amount of coffee should be thrown in the ocean or set on fire.

With that, they hoped to keep the price of the coffee the same, since the amount of it available wouldn’t be that high. At some point, the Vargas government started to buy the coffee from the producers so they could stay in business. But the sugar production was highly affected, and some sugar mills just stopped working. 


This article discussed what were the long-range effects of The Great Depression. For that, the article explained what The Great Depression was, what caused it, and how it impacted the lives of regular people.

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