Tuesday, November 27, 2007

Reasons Behind the Wall Street Crash

I received an interesting question here about "What Caused the Wall Street Crash of 1929"

Implicit in the question was the idea of 'flawed capitalism' Flawed capitalism is not a term I have used very frequently, but, basically it refers to the market failures inherent in a Capitalist society.

Some of the causes I touch on include:

  1. Recession in agriculture (agriculture sectors often get left behind when an economy grows)
  2. Speculative Bubbles - This has been a recurring theme in any economy. The Stock Market crash was one of the most notorious. However, some would argue the US housing market is an example of a similar speculative bubble
  3. Production increasing faster than consumer spending power

Other articles of interest

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