The global economic crisis following World War I was caused by:
1. Unpaid WWI debts: After World War I, many countries had accumulated substantial debts from the costs of the war. Germany, in particular, faced enormous reparation payments as part of the Treaty of Versailles. These unpaid debts created financial strain and economic instability, contributing to the global economic crisis.
2. Overspeculation: During the 1920s, there was a period of excessive speculation in the stock market, especially in the United States. Investors were buying stocks on margin, meaning they were borrowing money to invest, which artificially inflated stock prices. This speculative bubble eventually burst, leading to the stock market crash of 1929 and triggering the Great Depression.
Both unpaid WWI debts and overspeculation played significant roles in causing the global economic crisis after World War I. The combination of these factors, along with others like protectionist trade policies and agricultural overproduction, led to a severe downturn in the world economy and widespread economic hardship.
