European 20th century economy Flashcards
(22 cards)
Conditions pre-1914
Golden age of globalisation with free capital flow and free trade
Cost of WW1 (4)
3.5% of population dead (dependency ratio/more injured)
Russian 1920 output 13% of 1913
Break of empires; Ottoman, Austro-Hungarian, Germanic and Tsarist
Heavy debts on Germany, Austria ad Hungary
How successful was recovery after 1918? (3)
Output not equal until 1925 but per head still lower
Unemployment still high
Output sill lagging in C and E Europe
What caused Hyperinflation?
Output unchanged combined with excess money supply
Hyperinflation rate
Inflation 1000%/year in Germany, Austria, Hungary and Poland
Effects of Great Depression (4)
Wholesale PL falls 50%
Stocks crash 50%
Trade falls 60%
Massive rise in unemployment (Germany at 44% 1932)
Causes of Great Depression
Balance of payments surplus innefficiently used in speculation not investment
Wall street crash 1929 reduces export market
Bank crisis leads to fall in credit
What was the main driver of recovery in the inter-war years?
Rearmament
Costs of WW2 (4)
40 million dead+ 30 million wounded
1/5 of housing stock lost
Output 1/2 in many countries
Infrastructure and agriculture hit worst
Country that survived the Great Depression?
USSR- Continued to industrialise rapidly in isolation
4 Outcomes of post-war settlement
Europe divided between capitalist ans communist systems
USA Marshall plan supports European imports
USSR drains capital from E.Europe
Creation of IMF and World bank
Western recovery (3)
GDP recovery by 1950
Limited Nationalisation of key industries and scarce resources
$13bn of Marshall aid used for capital and food imports
Eastern recovery (2)
Due to relocation of capital and resources to USSR E. Europe suffered high inflation and 80% of output recovery by 1950
USSR benefited with output much greater by 1950
3 characteristics of Western boom 1950-1970
4% average GDP per capita growth rate
Income 2.5x’s that of 1950
Shift from primary sector output to secondary/tertiary
3 Sources of Western Boom 1950-1970
High investment and labour factor productivity
Export growth
High immigration participation rate and employment rate
3 characteristics of Eastern European boom 1950-1970
GDP growth 5.7%
Wages and living standards still 1/2 of West
Transformation from agrarian society to industrial economy
3 Sources of Eastern European boom 1950-1970
By 1950 extensive nationalisation makes central planning extensive growth strategy effective
Increase in world trade share
Mobilised population to increase participation rate
Western vs Eastern Growth (3)
Both underwent massive transformations
Eastern growth was more unbalanced
Western open markets led to more innovation and trade
3 characteristics of West in crisis 1970’s
Output in recession for first time since WW2
Unemployment double that in 1960’s
Inflation in double figures
3 Causes of Western crisis 1970’s
300% rise in price of oil
Labour productivity stagnant and supply less elastic
Lower investment as % of GDP
Failure of Eastern growth strategy (3)
Structure of economy makes R+D difficult resulting in poor export performance (Western crisis also reduced demand for Exports)
Debt crisis caused shortage of goods
Attempts to reform system led to collapse
3 Outcomes of USSR collapse
Massive contraction in GDP (40% in Russia in 8 years)
Many countries join EU after 2004
Migration from East to West
