21 September 2015by

Sigrid Brevik Wangsness

I. 18th Century Economic reasons for the War of Independence (1775-1783)

Agriculture as the main economic activity 

 

The Industrial Revolution and development of a modern economy

 

How can we explain the tremendous growthof the US economy since the early 19th century?

1 6 The free-enterprise system (Adam Smith)

2 7

3 8

4 9

5 10

 

Focus on opportunity to succeed through:

1.

2.

3.

4.

◦Poor immigrant from Scotland

◦From factory worker to one of the richest men in the world

◦Founded a steel company, consolidated the steel industry

◦A philanthropist

Development of corporations

a)Why did corporations replace many family businesses and partnerships in the US?

b)How did the giant corporations develop?

b)Consolidation in major industries: oil, steel, railroads

 

To what extent did the US government intervene in the economy in the 20th century? 

1. Early 20th century

oTariffs

oTrust busting

o1913: The Federal Reserve (The Fed)

2. The Roaring 20soGrowth in mass production and consumptiono ProhibitionoSpeculation on the stock market

3. The crash in October 1929 o Why?

4.The Depression of the 1930so25% unemployment, extreme poverty

5. The New Deal o The election of Franklin D. Roosevelt in 1932• Creating jobs• Social Security• Regulation of finance

o The three Rs:• Relief• Recovery• Reform

Roosevelt was influenced by a new economic theory: A managed economy

John Keynes: The General Theory of

Employment, Interest and Money (1937)

6. World War IIoGovernment control of large parts of the economyo Full employmentoConsensus

 7. The Post-War Period

How has Big Business profited from co-operation with the US government?

 

Major growth of the US economy from 1945-1970

World economic dominance

Sustained growth in the 50s and 60s

Consolidation in the 60s

Mid-1970s: Stagflation and recession New economic theory: Monetarism

Milton Friedman – the ”Chicago school” of economics

”Supply-side” economic theory (1970s/80s)

 

1980s: The decade of the Yuppies  Economic growth, but at a slower pace towards the end of the period.

Ronald Reagan: 1980-88

Continued shift in the workforce from manufacturing to services and high-tech.

Declining number of workers, but increased production and efficiency.

Development of conglomerates and multinationals.

From being the world’s biggest creditor the US became the biggest debtor.

Foreign investment inside the USA became greater than US investment abroad.

Deregulation: fewer restrictions and less government intervention 

1987: Stock market crash. World recession

1990 - 1992: Recession. George Bush Sr. Signs of recovery at the end of his term.

1993 - 2000: Growth. Boom. Bill Clinton. Eight years of

uninterrupted growth. Signs of decline at

the end of his term.

 

2000/2001: "The new economy” (dot.com shares) "A bubble economy”?

The IT bubble burst: Prices of IT shares dropped dramatically

A major slowdown of the US economy

Sectors of the economy sliding into recession 

September 11th 2001

2002 - early 2003: Signs of recovery, but sluggish

2003 - 2007: Relative growth (GDP: 2.6% in 2007), stability and relatively

low unemployment (4.7% in 2007).  

2008 – 2009: Financial crisis. Recession

2009 - 2013: Slow recovery

2014: 2.5% growth, but economic data difficult to interpret.

2015: Better than it looks?