lec_20_111B - ECN 111B: US Economic History since the ECN...

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Lecture 20 Lecture 20 Onset of the Great Depression Onset of the Great Depression ECN 111B: US Economic History since the ECN 111B: US Economic History since the Civil War Civil War Winter 2010 Winter 2010
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Word cloud from Econ blogs 22/2/09: http://www.knowingandmaking.com/2009/02/economics-zeitgeist-22-february-2009.html
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Lecture 20 Outline Lecture 20 Outline The US economy 1920-1930 Stock Market Crash Bank Panics, Bank Failures and Fed Policy International dimensions The face of the Depression
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KEY Readings for Today’s KEY Readings for Today’s Lecture Lecture Essential Reading: Walton and Rockoff 10 th and 11 th eds. ch. 22 and parts of ch. 23 Suggested Reading Atack and Passell ch. 21
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The Great Depression: Some The Great Depression: Some Figures Figures This is a watershed economic event The world economy has not seen anything as big since. Neither has the US. Real GDP falls by 25% (1929-1933). Industrial output falls by one half! (48%) (Gross) Investment falls from 18 to 1% of GDP Deflation: prices down by 33% Unemployment up to 25%
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The Great Depression The Great Depression The big questions Why did it start? Why was it so deep? Why was it so long? Could it happen again? What changed because of the Great Depression? Regulation, market-based systems seen as weak, reduced capital mobility, Bretton Woods, Unemployment insurance, social security, minimum wage, bank regulation, welfare system, centralization of monetary policy at the Federal Reserve
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The Boom of the 1920s The Boom of the 1920s In the US the 1920s was the longest un-broken expansion until the 1990s. An era of technological change—radio and cars not internet and microprocessors In the US growth was based on consumer durables and construction. Federal Reserve’s accommodating stance was key.
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Weaknesses in the 1920s Weaknesses in the 1920s In the US growth was based on consumer durables
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This note was uploaded on 03/11/2010 for the course ECN ECN111b taught by Professor Meissner during the Winter '10 term at UC Davis.

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lec_20_111B - ECN 111B: US Economic History since the ECN...

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