Economics 2150A/B Study Guide - Quiz Guide: Wall Street Crash Of 1929, Open Market Operation, Roaring Twenties

• School: Western University
• Department: Economics
• Course: Economics 2150A/B
• Professor: Colin Denniston

Document Summary

The world economy in 1913: world gdp per capita from 1990int in 1820 to 1543 in 1913, a lot of that is the west pulling ahead. Integration of world economy: 1913, world imports + exports represent about 1/3 of world gdp: fixed exchange rate regime: gold standard (gs)era. Shock of ww1: destruction of capital and mobilisation of workers = fall in gdp per capita, reduction in trade flows during the war, suspension of gs, war debts: france and uk borrow heavily from usa. Recovery: gdp per head starts growing again, growth particularly high in usa roaring 20"s", high inflation in europe but countries end up going back on gs. War financed by borrowing, not taxation: complex network of international indebtedness. Usa was the main lender and was responsible for 60% of international lending: germany most indebted country. Solution debt monetisation: government prints money to repay debt govt asks cb to keep ir low.