What policy instruments were deployed to contain the Great Economic Depression?

The Great Depression (1929–39) collapsed output, prices and employment worldwide; governments, abandoning laissez-faire orthodoxy, deployed a new arsenal of monetary, fiscal, regulatory and trade instruments.

Monetary instruments

• Exit from the gold standard — Britain (1931), the USA (1933) — freed countries to devalue and expand money supply; recovery broadly followed the order of exit.
• Cheap-money policies cut interest rates to revive credit and investment.

Fiscal and employment measures

• Roosevelt's New Deal pursued relief, recovery and reform through public works — the Civilian Conservation Corps, Works Progress Administration and Tennessee Valley Authority — while the Agricultural Adjustment Act paid farmers to cut output and restore prices.
• Deficit-financed public investment, later theorized by Keynes in the General Theory (1936), was practiced early by Sweden's counter-cyclical budgets and, in distorted form, by Germany's public-works and rearmament drive.

Financial regulation and social protection

• The Emergency Banking Act and bank holiday (1933) halted runs; Glass–Steagall separated commercial from investment banking; the FDIC insured deposits; the SEC (1934) policed securities markets.
• The Social Security Act (1935) created unemployment insurance and old-age pensions — foundations of the welfare state.

Trade instruments — largely counterproductive

• The Smoot–Hawley tariff (1930) and retaliation shrank world trade; imperial preference (Ottawa, 1932) and currency blocs fragmented the world economy.

The Depression thus legitimized state management of the economy — macroeconomic stabilization, financial regulation and social insurance — a template revived in 2008 and 2020.