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Comparative Studies | Economics | Bangladesh | Volume 8 Issue 7, July 2019

Causes and Policy Responses of the Great Depression and the Financial Crisis of 2008: A Comparison

Musharrat Azam

Abstract: This paper does a comparative analysis of the causes and policy responses between the Great Depression of 1929 and the Financial Crisis of 2008. The Great Depression in 1929 originated from a stock market bubble burst and a subsequent rise in interest rates due to the Federal Reserve’s contractionary monetary policy. The Financial Crisis of 2008 was on the other hand, caused through a real estate bubble burst that escalated with the creation of subprime mortgage backed securities. The Great Depression spread throughout the countries that had been maintaining a strict adherence to gold standard. The Financial Crisis transmitted outside the United States through the process of securitization. A series of monetary and fiscal policies and banking reforms eventually helped overcome the slowdown in economic growth caused by these two financial crises.

Keywords: Financial crisis 2008, Great Depression

Edition: Volume 8 Issue 7, July 2019,

Pages: 1728 - 1730