ECON 2200 Lecture Notes - Lecture 42: Human Capital, World War I

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14 May 2018

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ECON 2200

Lecture 42

• Real per capita earnings increasing

o Rose by 23% between 1919 & 1929

1. High demand for labor drove up wages

2. Human capital increase lead to increased productivity

which drove up wages

1896-1919: "Golden Era" for farmers

• Farm prices & incomes rising

• Property values increasing

• New/improved machinery

o Productivity is up

• Biological & chemical innovations

o Productivity is up

• Farmers encouraged to expand output during WWI (increased

European demand)

o Government price supports for basic crops

o Investments in land & machinery

1. 1915-1922: Farm credit A. doubled

 US agricultural output increased

 Long term farm debt (mostly for new land):

 1910 = $3.2 billion

 1923 = $11 billion

. By mid-1920s, farm prices recover, but…

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