ECO342Y1 Lecture Notes - Interwar Britain, German Gold Mark, Government Debt
Document Summary
Governments end war with huge debts, most economics flooded with liquidity. U. s. was the major creditors; u. s. credit financed allies imports during the war; the loans ceased at the end of the war and the u. s. demanded repayments (so did uk). French tied repayment to reparations from war damage by the germans. So lack of funds for reconstruction, wrangle over repayment & reparations (sharp contrast with post-wwii actions and attitudes) Excess liquidity depreciation of currencies inflation (mini boom) Reparations: sources of resent, bitterness & hostility. Reparations was in the treaty but the exact amount (enormous, including damage & pension, etc. ) was determined later on. Germany given her importance in the european economy german revenge. Worst of all sub-periods (1890 1913; 1914 1951; 1951 1973; 1973 1994) Instability lots of ups and downs. Feistein, temin & toniolo"s observed stylized facts: Although phenomenon was worldwide, slowdown in certain areas (europe) was much more pronounced.
