Post-WWI recession

The post-WWI recession was an economic recession that hit much of the world after the First World War.

Related Topics:
Economic - Recession - First World War

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The decade before the war had seen some of the fastest economic growth in history. In many nations, especially in North America, this growth continued during the war as nations mobilized their economies to fight the war in Europe. After the war ended, however, the global economy began to decline. 1918-1919 saw a modest economies retreat, but the next year saw a mild recovery. The worst year of the recession was 1921 when the global economy fell very sharply.

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The recession was caused by the end of wartime production, along with an influx of labour from returning troops causing high unemployment. The war also had a lasting effect on global trade. The industries of continental Europe had been badly damaged and the Russian Revolution had removed that nation from the world economy. Monetarists argue the most important cause was wartime inflation caused by the borrowing and printing of money to fund the war effort. Free market economists also believe the recession was necessary. The rapid growth and increase in production had been largely due to the partial command economy imposed during the war. Free marketers believe that any such growth is illusory and must later be paid for in the form of a recession.

Related Topics:
Russian Revolution - Monetarist - Inflation - Free market - Command economy

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