Question

Compare the key elements of the Great Depression to the recent recession, often called the Great Recession.

Answer 1

The Great Recession that began in 2008 actually saw a larger decline of the stock market in the initial fall of stock prices. The Dow Jones Industrial average saw a loss of 54% of its value in a year and a half.  In the first year and a half of the Great Depression that began in 1929, the stock market lost 45% of its value.  The same thing was true on the worldwide stock market, that the losses in 2008-2009 were steeper than those in following the crash in 1929.  Part of the reason for the quicker reaction of world markets in the 21st century version is how much more interconnected global markets had become.

But where the Recession of the early 2000s showed a steep initial decline, the economy also recovered more quickly than had happened during the Depression of the 1930s.  In the 1930s, the stock market continued to drop, to eventually lose almost 90% of its prior value.  The 54% drop in the market was the low point in 2009, and the market and economy began to stabilize and recover slowly from there.  In the 1930s, things went from bad to worse and the pain was deeper, longer.