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The economy in the inter-war years, image, image, image, image, image,…
The economy in the inter-war years
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During WWI-WWII the economies of European countries and the United States went through various phases
post-war crisis
recovery in the 1920s
the wall street creash of 1929
the Great Depression of the 1930
post war crisis
between 1918-1923, Europe experienced a significant economic crisis which was characterised by
high level of debt
loans from the United States intended to pay for the costs of war
Once the war ended, the loans had to be repaid
a shortage of products
due to the destruction of areas of agricultural land, factories and transport systems
as a consequence, an increase in prices
Germany
the most affected country
had to suffer the crisis and at the same time, pay war reparations
As a solution to the serious economic crisis
the German government circulated large quantities of bank notes
they were worth practically nothing because Germany had no gold
hyperinflation
The enormous quantity of worthless bank notes in circulation meant that the German people needed large amounts of money to buy basic food
Recovery in the 1920s
USA and Japan were the first countries to recover from the crisis, because their industries had not been devastated by war
This situation enabled the United States to help European countries come out of the economic crisis
In 1924
USA applied the Dawes Plan in Germany
This was a series of economic measures which involved loans and American investment in German industry
The Dawes Plan also revised and reduced war reparations payments
In 1925
Germany's economy began to recover
It was able to pay reparations to the victorious European countries
The United States also helped other European countries, by giving them loans and selling the consumer goods they lacked
It was a prosperous time, known as the roaring twenties
Economic prosperity
societu changed
the suffering of the war years had passed, and life was focused on enjoyment
These years were characterised by new forms of entertainment
The Wall Street crash (1929)
In 1929
the Wall Street stock market in New York collapsed
This was the beginning of a major economic crisis
leading to the Great Depression of the 1930s
causes of the crisis
Industrial overproduction
American industry had increased production in order to supply Europe
European industry started to recover and European countries bought less from the United States
consumption decreased even further
Agricultural overproduction
American agricultural system had increased its production
European countries began to produce their own agricultural products again
The situation was made worse by the increase in unemployment due to factories closing
Speculation on the stock market and excessive bank credit
during the period of prosperity
companies and individuals bought shares in companies on the Wall Street stock market because they offered guaranteed profits
The great depression of the 1930s
The Great Depression of the 1930s began with the Wall Street Crash of 1929 and continued for a decade
This economic crisis led to a fall in prices (deflation) and put an end to the prosperity of the roaring twenties
The consequences were the following
companies closed
Banks collapsed because of a lack of liquidity
Waged fell /unenployment increased
Millions of people were forced to live off charity and government support
world economy was affected
the United States reduced imports
Other countries, to save national production, adopted protectionist measures
decrease in the standard of living
generating discontent with the liberal capitalist system, which most people blamed for the crisis
