ECON 2200 Lecture Notes - Lecture 20: World War I
ECON 2200
Lecture 20
The Struggling Agricultural Sector
A. 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 doubled
US agricultural output increased
Long term farm debt (mostly for new land):
1910 = $3.2 billion
1923 = $11 billion
B. Following WWI, prices began to fall, esp 1920-21 (recession and
deflation)
• Debtor-farmers harmed
o Recall that unanticipated deflation harms debtors
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