Deflation
Deflation occurred periodically in the U.S. during the 19th century (the most important exception was during the Civil War). This deflation was at times caused by technological progress that created significant economic growth, but at other times it was triggered by financial crises — notably the Panic of 1837 which caused deflation through 1844, and the Panic of 1873 which triggered the Long Depression that lasted until 1879. These deflationary periods preceded the establishment of the U.S. Federal Reserve System and its active management of monetary matters. Episodes of deflation have been rare and brief since the Federal Reserve was created (a notable exception being the Great Depression) while U.S. economic progress has been unprecedented.
History of Western civilization
Europe was relatively unstable following World War I. Although many prospered in the 1920s, Germany was in a deep financial and economic crisis. Also, France and Britain owed the U.S. a great deal of money. When the United States went into Depression, so did Europe. There were perhaps 30 million people around the world unemployed following the Depression. Many governments helped to alleviate the suffering of their citizens and by 1937 the economy had improved although the lingering effects of the Depression remained. Also, the Depression led to the spread of radical left-wing and right-wing ideologies, like Communism and Fascism.