Question: What does the consensus think led to a sudden reduction in consumption and investment spending?
About the article "Great Depression", section "Causes".

Candidate passages:
There were multiple causes for the first downturn in 1929.
These include the structural weaknesses and specific events that turned it into a major depression and the manner in which the downturn spread from country to country.
In relation to the 1929 downturn, historians emphasize structural factors like major bank failures and the stock market crash.
In contrast, monetarist economists (such as Barry Eichengreen, Milton Friedman and Peter Temin) point to monetary factors such as actions by the US Federal Reserve that contracted the money supply, as well as Britain's decision to return to the gold standard at pre–World War I parities (US$4.86:£1).
Recessions and business cycles are thought to be a normal part of living in a world of inexact balances between supply and demand.
What turns a normal recession or 'ordinary' business cycle into a depression is a subject of much debate and concern.
Scholars have not agreed on the exact causes and their relative importance.
The search for causes is closely connected to the issue of avoiding future depressions.
A related question is whether the Great Depression was primarily a failure on the part of free markets or a failure of government efforts to regulate interest rates, curtail widespread bank failures, and control the money supply.
Current theories may be broadly classified into two main points of view and several heterodox points of view.
There are demand-driven theories, most importantly Keynesian economics, but also including those who point to the breakdown of international trade, and Institutional economists who point to underconsumption and over-investment (causing an economic bubble), malfeasance by bankers and industrialists, or incompetence by government officials.
The consensus among demand-driven theories is that a large-scale loss of confidence led to a sudden reduction in consumption and investment spending.
Once panic and deflation set in, many people believed they could avoid further losses by keeping clear of the markets.
Holding money became profitable as prices dropped lower and a given amount of money bought ever more goods, exacerbating the drop in demand.
There are the monetarists, who believe that the Great Depression started as an ordinary recession, but that significant policy mistakes by monetary authorities (especially the Federal Reserve), caused a shrinking of the money supply which greatly exacerbated the economic situation, causing a recession to descend into the Great Depression.
Related to this explanation are those who point to debt deflation causing those who borrow to owe ever more in real terms.
There are also various heterodox theories that downplay or reject the explanations of the Keynesians and monetarists.
For example, some new classical macroeconomists have argued that various labor market policies imposed at the start caused the length and severity of the Great Depression.
The Austrian school of economics focuses on the macroeconomic effects of money supply, and how central banking decisions can lead to over-investment (economic bubble).
 ""Public Purse" redirects here.
For the term used in relation to the British monarchy, see Privy Purse."
In National Income Accounting, government spending, government expenditure, or government spending on goods and services includes all government consumption and investment but excludes transfer payments made by a state.
Government acquisition of goods and services for current use to directly satisfy individual or collective needs of the members of the community is classed as government final consumption expenditure.
Government acquisition of goods and services intended to create future benefits, such as infrastructure investment or research spending, is classed as government investment (government gross fixed capital formation).
Government outlays that are not acquisition of goods and services, and instead represent transfers of money, such as social security payments, are called transfer payments and are not included in what the national income accounts refer to as government expenditure.
The two types of government spending, on final consumption and on gross capital formation, together constitute one of the major components of gross domestic product.
John Maynard Keynes was one of the first economists to advocate government deficit spending as part of the fiscal policy response to an economic contraction.
In Keynesian economics, increased government spending is thought to raise aggregate demand and increase consumption, which in turn leads to increased production.
Keynesian economists argue that the Great Depression was ended by government spending programs such as the New Deal and military spending during World War II.
According to the Keynesian view, a severe recession or depression may never end if the government does not intervene.
Classical economists, on the other hand, believe that increased government spending exacerbates an economic contraction by shifting resources from the private sector, which they consider productive, to the public sector, which they consider unproductive.
Government spending can be financed by seigniorage, taxes, or government borrowing. 
Consumption is a major concept in economics and is also studied by many other social sciences.
Economists are particularly interested in the relationship between consumption and income, and therefore in economics the consumption function plays a major role.
Different schools of economists define production and consumption differently.
According to mainstream economists, only the final purchase of goods and services by individuals constitutes consumption, while other types of expenditure — in particular, fixed investment, intermediate consumption, and government spending — are placed in separate categories (See consumer choice).
Other economists define consumption much more broadly, as the aggregate of all economic activity that does not entail the design, production and marketing of goods and services (e.g.
the selection, adoption, use, disposal and recycling of goods and services). 
Linear regression is the predominant empirical tool in economics.
For example, it is used to predict consumption spending, fixed investment spending, inventory investment, purchases of a country's exports, spending on imports, the demand to hold liquid assets, labor demand, and labor supply. 
The causes of the Great Depression in the early 20th Century are a matter of active debate among economists, and are part of the larger debate about economic crises, although the popular belief is that the Great Depression was caused by the 1929 crash of the stock market.
The specific economic events that took place during the Great Depression have been studied thoroughly: a deflation in asset and commodity prices, dramatic drops in demand and credit, and disruption of trade, ultimately resulting in widespread unemployment and hence poverty.
However, historians lack consensus in determining the causal relationship between various events and the government economic policy in causing or ameliorating the Depression.
Current theories may be broadly classified into two main points of view and several heterodox points of view.
First, there are demand-driven theories, such as Keynesian economics and Institutional economists who argue that the recession was caused by underconsumption and over-investment (thereby causing an economic bubble).
The consensus among demand-driven theories is that a large-scale loss of confidence led to a sudden reduction in consumption and investment spending.
Once panic and deflation set in, many people believed they could avoid further losses by keeping clear of the markets.
Holding money therefore became profitable as prices dropped lower and a given amount of money bought ever more goods, exacerbating the drop in demand.
Second, there are the monetarists, who believe that the Great Depression started as an ordinary recession, but that significant policy mistakes by monetary authorities (especially the Federal Reserve), caused a shrinking of the money supply which greatly exacerbated the economic situation, causing a recession to descend into the Great Depression.
Related to this explanation are those who point to debt deflation causing those who borrow to owe ever more in real terms.
There are also various heterodox theories that reject the explanations of the Keynesians and monetarists.
Some new classical macroeconomists have argued that various labor market policies imposed at the start caused the length and severity of the Great Depression.
The Austrian school of economics focuses on the macroeconomic effects of money supply and how central banking decisions can lead to malinvestment.
Marxian economists view the Great Depression, with all other economic crises, as a symptom of the classism and instability inherent in the capitalist model.