What is the difference between the Great Depression and the Great Recession?
Answer (1)
The Great Depression and the Great Recession were both major economic crises, but they happened in different times and had different causes and impacts. Understanding their differences helps us learn from the past and prepare for the future.Great DepressionThe Great Depression started in 1929 with the crash of the U.S. stock market, known as Black Tuesday. Over the next ten years, the economy suffered badly. Banks closed, businesses failed, and unemployment in the U.S. reached 25%, the highest ever recorded. International trade collapsed, and millions of people lost their jobs and homes. There were no strong government safety nets back then—no social security, unemployment insurance, or strong banking regulations. The crisis affected many countries, including those in Europe and Asia, and it took over a decade to fully recover.Great Recession In contrast, the Great Recession happened more recently, between 2007 and 2009, and was caused mainly by financial problems related to subprime mortgages and risky investments like CDOs. The housing market in the U.S. collapsed because too many people were given loans they could not repay. This led to the failure of big financial institutions like Lehman Brothers. The crisis quickly spread to other countries because of globalization.Unlike in the 1930s, governments in the 2000s acted faster. The U.S. Federal Reserve lowered interest rates and created stimulus programs. Governments around the world, including in Asia and the Philippines, also took steps to protect their economies. As a result, the recession lasted for a shorter period compared to the Great Depression.
