Economics Society-UNIMAK

THE GREAT DEPRESSION (1929–1939)

What it was, why it happened, who was responsible, why policies failed, how Keynes changed everything, and what we learn from it.

1. What Was the Great Depression?

The Great Depression was the deepest global economic collapse in modern history.
It wasn’t a normal recession ... it was a complete breakdown of financial systems, trade, confidence, and policy.

It created:

Massive unemployment (U.S. 25%, Germany 30%)

Bank runs and failures

Collapse of trade

Falling prices (deflation)

Poverty across continents

2. Why Did It Happen? ... The Real Causes

There was no single cause. It was a chain reaction of economic imbalances + policy mistakes + global rigidities.

1. The 1929 Stock Market Crash

Driven by speculation and buying stocks with borrowed money

When the bubble burst → panic selling → wealth destruction

The crash triggered the downturn, but did NOT cause the decade-long depression alone.

2. Banking System Collapse

More than 9,000 banks failed in the U.S.
No deposit insurance → people ran to withdraw savings → banks died → credit evaporated.

A dead banking system = a dead economy.

3. Deflation Spiral

Prices fell sharply. Deflation is dangerous because:

Wages fall

But debts stay fixed

Businesses cut production

Unemployment rises

People save instead of spend

A downward spiral.

4. Smoot–Hawley Tariff (1930)

The U.S. raised import taxes to protect domestic jobs.
Other countries retaliated → global trade collapsed 60%.

This turned a recession into a worldwide disaster.

5. The Gold Standard – The Biggest Structural Mistake

Countries tied their money to gold.
This forced governments to:

Avoid printing money

Raise interest rates

Cut spending

Maintain fixed exchange rates

During crisis, this was su***de.

Countries that abandoned the gold standard earliest recovered fastest.

3. Who Was Responsible?

No single villain, but several major failures:

Investors & Banks

Extreme speculation

High leverage

No reg

WHAT IS KUZNET CURVE IN ECONOMICS ?
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Kuznets curve is named after a Russian—born American economist and statistician Simon Kuznets, who proposed this theory in the 1950s based on his research on economic growth in the United States. According to Kuznets' curve hypothesis, the shape of the graph is an inverted U-shape, representing the impact of economic development on inequality.

Kuznets curve is a well-known economic theory that explains the relationship between economic growth and income inequality. The theory seeks to explain the pattern of income inequality occurring in a country undergoing economic expansion or industrialization.

According to the Kuznets curve theory, as a country undergoes industrialization and economic development, there is typically a rise in income inequality—upward slope from left to right in the initial stages of this process. However, after a certain point, the level of inequality starts decreasing—downward slope from left to right, and eventually, it reaches a state of balance or equilibrium.

Takeaway:
—Inverted U-Shaped Curve: The Kuznets Curve is typically represented as an inverted U-shaped graph, with income inequality on the y-axis and economic growth (GDP per capita) on the x-axis.
—Initial Increase in Inequality: As economies transition from agricultural to industrial, income inequality rises due to disparities in wages and opportunities.
—Peak and Decline: As economies mature, inequality decreases due to factors like increased access to education, social welfare programs, and progressive taxation.

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Economics is involved in every aspect of our daily lives.

When we consume something, we definitely think about our utility and budget and producers who produce and sell their products in the market to the consumers,they want to profit maximise and minimise cost of production and Continuosly products price are changed...it is the part of our life..

Consumer utility, producer profit, market behaviour, product price, budget,total cost of production all are included in the Economics.

Also, international trade ( Export , import and restrictions of trade ,such as tarrifs ,quotas etc) , Government budget (Government' revenue and Expenditure), Banking system, production process, Technical analysis, project planning, different types of Market and their various role and behaviours all are discussed in the Economics.

Inflation and unemployment are the part of our life and closely related in our daily life..It is easy to understand for Economics.

UNIVERSITY OF MAKENI (UNIMAK)
ECONOMICS DEPARTMENT

*DEPARTMENTAL FIELD TRIP AND RESEARCH WORK*

Theme: *"Harnessing Natural Resources for Sustainable Economic Development: A Case Study of Bumbuna Hydro Dam and Mines".*

*Date:* 3rd, 4th and 5th June 2025
*Take Off Time:* 9:00am
*End Point:* Bumbuna Town
*Places to visit:* Kingho Mining Company Ltd and Bumbuna Hydro Dam

FEATURING:
▪Overview of the trip with staff
▪Round trip at the Mining site and Hydro Dam
▪Group Research Work
▪Group Presentation Planning
▪Edutainment Activities
▪And many more....

As Budding Economists, we are committed in harnessing natural resources and the role these sectors play in promoting sustainable economic development. At the end of our trip, we will present a comprehensive report to the University as part of our research work as a department.

PUBLIC RELATIONS DESK - ECONOMICS SOCIETY (ECONSO), UNIVERSITY OF MAKENI (UNIMAK).

We extend our heartfelt appreciation to Mr. Emmanuel Fayia Bongay for his wonderful paper presentation at the University of Makeni, Economics Department. We say thank you.

University of Makeni

Department of Economics

Webinar Presentation

Topic: Achieving and Sustaining the Green Economy and It Potential Benefit to the Economic Growth of Sierra Leone: Empirical Analysis http://www.sciencepg.com/article/10.11648/j.ijae.20240904.15

Presenter: Emmanuel Bongay
( Economist|Researcher | Trainer SUSTAINABLE POVERTY REDUCTION RESEARCH CENTER)

Module: Economic Research Methods

Moderator: Mr. Lathiff Sesay

Date: Friday, 13th December , 2024

Time: 10:30 AM to 12:00PM

Venue: Online Session

All who wish to join are welcome.

University of Makeni

Department of Economics Society-UNIMAK

Webinar Presentation

Topic: An Empirical Examination of the Determinants of Trade Balance in Sierra Leone: A Multiplicative Approach

Presenter: Peter Saio Bangura
( HR- Monitor, Research Teaching Assistant and Acting Secretary, Department of Economics, Unimak)

Module: Economic Research Methods

Moderator: Mr. Lathiff Sesay

Date: Friday, 29th November 2024

Time: 10:30 AM to 12:00PM

Venue: Online Session

https://meet.google.com/ech-bupo-zji
All who wish to join are welcome.

Thanks and appreciate to y'all that hike with us today, It was really nice with a lot of fun.

Hope you guys will be having subsequent gathering like this, years to come.

Econso na we so so 🫶🏽❤️🙌🏽

Recession Hike with Economics society university of Makeni students.
Join to have better experience.
Economics can do it better.