World-System (1900-1950) World In Depression

  One way to evaluate the Stock Market Crash of 1929 in the US is to conduct a Free Simulation (the dashed read line in the graphic above). When compared to the actual data (solid black line), the simulation shows a much sharper collapse of growth (US1) in the USGD model after the 1929 Crash. This post  explains how to interpret the result.

In a prior post ( here ), I took a  Systems Theory  perspective to defining the  Great Depression . From that perspective, there really wasn't a Great Depression, as such, but rather an  Economic Bubble  that started with  World War I  ( WWI ) and ended when the Bubble was popped by the  Stock Market Crash of 1929 . This leaves open the question of what caused the Bubble, a topic I address in this post. The  Economic Bubble  of the  Roaring Twenties  was caused by forces in the US. The primary forces were the usual culprits: Unemployment-Business Conditions and the Stock Market Crash. The Bubble would have been eliminated by linking the US to the World System. In this post, I look in more detail at what caused the Bubble and how the Bubble could have been prevented. Notes WE20 Measurement Model W5 = (0.7043Q-0.599N-0.355XREAL)   W6 = (0.2178Q+0.537N-0.7976L) USGD Model W Input Preventing the crash would have involved ...

  In a prior post ( here ), I took a Systems Theory perspective to defining the Great Depression . From that perspective (Path A   here ), there really wasn't a Great Depression, as such, but rather an Economic Bubble that started with World War I ( WWI ) and ended when the Bubble was popped by the Stock Market Crash of 1929 .  From Another perspective ( Path  B   here ) something bad did (or did not) happen that created a massive economic collapse.  Path  B  is the conventional explanation which led to a vast literature (see the Notes below) driven by Monetary Theory , Keynesian Theory and other perspectives ( Systems Theory  is not one of the conventional perspectives ) .  In this post, I look at  Path  B  more carefully. I eliminate the two dominant historical controllers in the  US_E20 Model  ( US2 and US3 ) to show that, without them, there was no Crash. The biggest shock to US1 is from US3 which invo...