ABSTRACT
The depression which began in 1929, and continued to deepen in most countries until 1932, was the most severe international depression which had ever been recorded. Apart from its severity, it was notable for two features; it affected both industrial and primary producers, and it was rapidly transmitted around the world by the mechanisms of international trade and payments. By 1932, there were about 30 million people recorded as unemployed, chiefly in the industrial economies. In the agricultural regions of the world, the depression was felt more in the shape of falling incomes, in both domestic and export markets, and unemployment either went unrecorded or took the form of higher underemployment. For all economies exposed to it, the depression reduced national incomes. In the process, prices also dropped precipitously. The USA, which was the industrial economy most severely affected, saw its GDP fall (in real terms) between 1929 and 1932 by 28 per cent. For the industrial economies as a whole, average GDP in those years fell by 18 per cent in real terms. 1
