Analysis of the Governments Role in the Economic Crisis During the Interwar Period

An economic crisis or a financial crisis encompasses a broad variety of undesirable situations that impact the economy, including recession, inflation, and stagflation. Using two examples from the Interwar Period, this paper examines the role of the state and its reactions in response to economic crises. Both economic crises led to high unemployment, social unrest, and mass impoverishment in their respective countries. Similarly, both nations found their way out through strong government interventionism and legislative changes, resulting in greater state control over the market. This paper settles on two major economic crises from the early 20th century, hyperinflation in the Weimar Republic and the Great Depression of the United State, and take a further look at the causes of these crises, their impacts, and the state's efforts to overcome them. In conclusion, although two economic crises are specifically caused by different reasons under different backgrounds, both of the countries overcome the effects through more similar procedures. In short, both countries increased their government presence and level of interventionism in the economy. Especially in increasing government investments on public projects, such as infrastructure and improvement on social securities, appeared to be the solution for economic crises during the Interwar Period