What was the main cause of the Great Depression?

The primary cause of the Great Depression was indeed a stock market crash and economic instability. The stock market crash of 1929 served as a catalyst that led to widespread financial turmoil across the United States and beyond. Following the crash, banks failed, businesses shuttered, and unemployment soared, creating a spiral of economic decline that culminated in a decade-long depression.

This situation was exacerbated by existing weaknesses in the economy, such as overproduction and underconsumption, which contributed to a fragile economic environment. The effects extended globally, as many nations struggled with their own economic challenges, leading to a worldwide depression. The significance of the stock market crash lies in how it exposed the vulnerabilities of the economic system at the time, prompting significant changes in policies and practices in the years that followed.

While other factors, such as global conflicts or the rise of totalitarian regimes, did influence economies in various ways, they were not the central trigger of the Great Depression itself. Similarly, the introduction of the New Deal came later as a response to the economic crisis, aiming to provide relief and recovery, but it was not a cause of the Great Depression. Understanding these historical contexts highlights why the stock market crash and the resulting economic instability are regarded as the main causes