HI125 Lecture Notes - Lecture 14: National Industrial Recovery Act, Business Cycle, Dust Bowl
Document Summary
The post-war system is very fragile because of imbalances such as war reparations, debt, and tariffs. Attempts to restore the pre-war system introduced further instability. The great depression was a consequence of global interactions, but the. The failure of traditional policies to limit the depression led to increased state intervention the economy (keynes). Usa before war . 7 billion (debtor, owes money to europe); after war. (cid:1006). 6 (cid:271)illio(cid:374) (cid:894)(cid:449)orld"s largest (cid:272)reditor (cid:374)atio(cid:374), europe o(cid:449)es (cid:373)o(cid:374)ey to. Europe owes america money (sell goods to rid of debts) Capital scarce and interest rates high in europe. Must send money abroad to complete the circle of repayments. But system does not work as expected: chronic deficits and surpluses. Britai(cid:374)"s foreig(cid:374) (cid:373)arkets disrupted by american and japanese competition. Britain no longer able to assert economic leadership. Us stock market has had a bull run. Capital returning to the us to invest there. Collapse of us outflow to europe (nearly 0 by end of year.
