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THE ECONOMY IN THE INTER-WAR YEARS, image, image, image, image, image,…
THE ECONOMY IN THE INTER-WAR YEARS
post-war crisis
1918-1923 --> Europe experienced a significant economic crisis
high levels of debts because of the costs of war
shortage of products afected in the prices and increase a lot
Germany problems
most severely affected country
they had to pay war reparations and at the same time, economic crisis
German people needed large amounts of money to buy basic goods
France decided to occupy the richest and most industrialised area of Germany, the Ruhr (because Germany couldn't pay France)
The great depression of 1930
began with the Wall Street Crash
crisis soon spread to Europe
Consequences
Wages fell
world economy was affected because of the reduction of imports
Companies closed
decrease in the standard of living
Recovery in the 1920s
The United States and Japan were the first countries to recover from the crisis (they were less affected by the war)
1924
Dawes Plan in Germany was used by United States
economic measures which involved loans
increasing the value of the German mark
France also abandon the occupied areas of the Ruhr
1925
Germany's economy began to recover
was able to pay reparations
United States also helped other European countries with loans
tries, by giving them loans and selling the consumer goods they lacked. As a result, by the mid-1920s, the world economy began to recover and grew steadily
I was prosperous time --> roaring twenties
During the economic prosperity...
the suffering of the war years had passed
new forms of entertainment (cabarets, music-halls, ballrooms, radio shows and cinema)
Consumerism and sales of consumer goods increased
The Wall Street crash of 1929
causes
Agricultural overproduction
American agricultural system had increased its production
After the war, European countries began to produce their own agricultural products again--> American agricultural production was maintained
surplus of production caused prices to fall
Speculation on the stock market and excessive bank credit
companies and individuals bought shares in companies--> obtained credit or loans from the banks
The banks collapsed and millions of citizens were ruined
Industrial overproduction
American industry had increased to supply Europe
American industry did not reduce levels of production when the economy was recovered
products available was greater than the number of products that were sold (that cause demand)
Companies lost money and some even had to close down and unemployment rose
