Economic History of the USA from 1920 to 1963
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The economy of United States is of much importance in respect to the world’s economy is concern. Many transitions and changes have taken place within the period of 1920 to 1963. During this period, many innovations and depressions have been witnessed in various business organizations and manufacturing technologies. Also during these moments especially in the early 1920s, the Federal Reserve System first put to test its controls and the nation moved to a dominant position in international trade and global business. In this paper, I will give a detailed discussion on the changes, which have taken place economically in United States from the year 1920 to 1963. The discussion is divided into three secessions; the first one is from the year 1920 until 1930, 1930 to 1950 and finally from 1950 to 1963.
Early 1920s United States economy recorded a very great depression in the nation’s economic growth. The overall production in the economy during this period GDP was of a comprehensive measure of aggregate economic activity. The real GDP was relatively rapid, which was approximately 4.2 percent a year from 1920 to 1929. In late 1920'sand early 1930's, it were marked by low profits, deflation, high unemployment, poverty and lost opportunities for economic growth and personal advancement in the United States. 1930s were called the decade of depression as it initiated a long economic decline that was accelerated into a world’s catastrophic depression of 1929 (Niemi, 1980). During these times, the Real total GNP fell to 10.2 percent from 1929 to 1930 at the same time as real GNP per capita fell to 11.5 percent from 1929 up to 1930.
In the year 1933, the American citizens were unemployed, industrial production was much lower to one-third of 1929 level. For reasons to upgrade the growth in economy, business proprietors and farmers were allowed to come together in establishing prices. This provided them with a profitable return and an upward increase turn under the National Recovery Administration (NRA) and the Agricultural Adjustment Administration (AAA). Despite of all this efforts, 10 million citizens were still unemployed, the economy seemed too lodged at a new plateau, in which the U.S. Supreme Court was ruling such agencies unconstitutional. Between the year 1935 to 1938, a deal was made, which was more of agribusiness and proconsumer. This deal was all about monetary policy and spending in aiding the unemployed citizens towards the success hence moving the economy toward recovery before 1940.
The economic growth of 1950s was relatively stable period of time. This is because the gradual growth during the period was the reason for economy growth to its peak in the 60s. One of the issues was inflation, which were majorly two major waves of inflationary conditions. A slow growth of productivity in the U.S economy was experienced especially in the service providers sectors. This sector experienced the biggest price increases as a result of the removal of price controls, which followed World War 2. Because of the slow development in productivity, there was a large increase in consumer demand and credit and an increase in consumer prices. Growth in the economy also led to an increase in popularity of financial intermediaries.1950 is recorded as the decade that eliminated poverty for the great majority of Americans citizens.
In 1955, the country had managed to get out of the previous year's recession whereby the gross national product (GNP) had grown at a rate of 7.6 percent. This growth rate was so great that the 1956 budget was predicted to be a surplus of almost 4.1 million. Despite of all this growth in the economy, it turned sharply down in 1957 reaching its low points in 1958. This is where the industrial production fell by 14 percent while the unemployment rate rose by 7.5 percent and cooperate profits plummeted by 25 percent. An interesting year in the economy of United States was in early 1920s, as it was the most severe depression in the history of United States. These brought sweeping changes in the role of the government.