The Forgotten Depression of 1920-1921 (This is NOT the Great Depression that occurred from 1929-1939).

Question

Briefly describe the overall crisis.

(For each response, also include your source’s author name so that you can keep up with where your information is sourced so that you can cite it in your final paper).

Answer 1

The Forgotten Depression of 1920-1921 was a sharp economic downturn that followed World War I. Unlike the long and severe Great Depression of the 1930s, this crisis was characterized by a rapid decline in industrial production, a significant drop in prices, and a sharp increase in unemployment, all occurring within a short period of time. The United States experienced deflation, which further exacerbated the economic troubles. Factors contributing to the crisis included the return to a peacetime economy, adjustments in supply chains, and the tightening of monetary policy by the Federal Reserve, which aimed to combat post-war inflation. Despite its severity, the depression was relatively brief, lasting approximately 18 months, as the economy recovered quickly starting in mid-1921.

Source: McElvaine, Robert S. "The Great Depression: America, 1929-1941." (1993).