Home
cover of episode Summer School 7: The Great Depression, the New Deal and how it changed our economy

Summer School 7: The Great Depression, the New Deal and how it changed our economy

2024/8/21
logo of podcast Planet Money

Planet Money

Chapters

The Great Depression, a confluence of debt, wealth inequality, and market oversaturation, was worsened by the gold standard. This system, requiring currencies to be backed by gold, forced central banks to raise interest rates during the crisis to prevent gold depletion, hindering economic recovery. Eventually, major economies like England and the U.S. abandoned the gold standard, enabling them to lower interest rates and stimulate growth.
  • The gold standard linked currency values to gold, requiring governments to exchange currency for gold at a fixed rate.
  • During the Depression, people panicked and traded currency for gold, fearing economic collapse.
  • Raising interest rates was necessary to stop the gold drain but worsened the economic downturn.
  • Abandoning the gold standard allowed central banks to lower interest rates, stimulating economic activity.
  • FDR's decision to abandon the gold standard in 1933 was influenced by an agricultural economist, George Warren.

Shownotes Transcript

Find all the episodes from this season here). And past seasons here). And follow along on TikTok here for video Summer School). When we last left the United States of America in our economic telling of history, it was the early 1900s and the country's leaders were starting to feel like they had the economic situation all figured out. Flash forward a decade or so, and the financial picture was still looking pretty good as America emerged from the first World War. But then, everything came crashing down with the stock market collapse of 1929. Businesses closed, banks collapsed, one in four people was unemployed, families couldn't make rent, the economy was broken. And this was happening all over the world. Today we'll look at how leaders around the globe intervened to turn the international economy around, and in the process, how the Great Depression rapidly transformed the relationship between government and business forever.*This series is hosted by Robert Smith and produced by Audrey Dilling. Our project manager is Devin Mellor. This episode was edited by Planet Money Executive Producer Alex Goldmark and fact-checked by Sofia Shchukina.Help support Planet Money and hear our bonus episodes by subscribing to Planet Money+ in Apple Podcasts) or at plus.npr.org/planetmoney).Always free at these links: Apple Podcasts), Spotify), the NPR app) or anywhere you get podcasts.Find more Planet Money: Facebook) / Instagram) / TikTok) / Our weekly Newsletter).*Learn more about sponsor message choices: podcastchoices.com/adchoices)NPR Privacy Policy)