Pressure from default of European countries

From class, we learned the bank panic was one of the factors that led to Great Depression along with Stock Market Crash. Similar to what happened in the world today, as the European countries has high risk of default, people start to panic. Business reduced investment, people are worried about the effect of them defaulting to the world, consumption decreased and etc. Luckily, we do not have gold standard anymore to bring us into worse situation. The European countries had also came up with a lot of reform and proposals to stimulate the economy and reduce the debt to prevent the risk of default.