UNIVERSITY SCHOOL OF BUSINESS

DEPARTMENT OF COMMERCE
Bachelor of Commerce (H)
GLOBAL CAPITAL MARKET (22CMT-285)
Course Instructor: Tejinder Singh
Employee No: 4473

DISCOVER . LEARN . EMPOWER

Depression and War (1931-1945):
Great Depression (1929-1939):
• Economic Turmoil: The stock market crash of 1929 triggered a global
economic downturn.
• Worldwide Impact: Unemployment soared, industrial production
plummeted, and international trade drastically declined.
• Currency Devaluation: Countries faced currency devaluation and
plummeting GDPs, exacerbating social and political unrest.

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Rise of Protectionism
• Trade Barriers: Nations turned to protectionist policies, imposing
tariffs and trade barriers to shield domestic industries.
• Beggar-Thy-Neighbor Policies: Competitive devaluations led to
currency wars, worsening global economic conditions.

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World War II (1939-1945)
• Global Conflict: The outbreak of World War II intensified economic
instability, redirecting resources towards war efforts.
• Economic Mobilization: Governments engaged in massive military
spending, which helped lift some countries out of the Depression but
at the expense of increased debt and economic imbalances.

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Emergence of Bretton Woods Agreement

• Post-War Planning: As WWII drew to a close, global leaders sought to establish a new
international monetary system to prevent future economic crises.
• Bretton Woods Conference (1944): Representatives from 44 Allied nations convened in New
Hampshire to design a new monetary framework.
• Bretton Woods Agreement:
• Fixed Exchange Rates: The agreement established a system of fixed exchange rates, with
currencies pegged to the US dollar, and itself pegged to gold.
• IMF and World Bank: The International Monetary Fund (IMF) was created to oversee exchange
rates and provide short-term financial assistance, while the World Bank aimed to support post-war
reconstruction and development.

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 Examples

1. Impact on Post-War Reconstruction:

The Bretton Woods Agreement laid the foundation for post-war
economic stability and reconstruction efforts, aiding Europe's recovery
through financial assistance and infrastructure development.
2. Long-Term Effects:
The system created relative stability in international trade and finance
for several decades, fostering economic growth in many participating
countries.

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 Conclusion
• The period from 1931 to 1945 was marked by the Great Depression and World War II, leading to
immense global economic turmoil and social upheaval. However, from the chaos emerged the
Bretton Woods Agreement, providing a framework for stability and collaboration among nations in
the post-war era. The agreement's legacy shaped international monetary relations for years to
come, fostering economic cooperation and development while also setting the stage for future
discussions on the global financial system.
• The tumultuous events of the Depression and War period emphasized the necessity of international
cooperation and frameworks like Bretton Woods to prevent similar economic catastrophes,
showcasing the significance of collaborative efforts in shaping the world's economic landscape.

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Assessment Pattern

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THANK YOU

For queries
Email: tejinder.usb@cumail.in