Book contents
- Frontmatter
- Contents
- Acknowledgements
- Note on the text
- 1 Epochs in economic history, 1919–39
- 2 The exchange rate regime and UK economic performance during the 1920s
- 3 Unemployment, 1919–38
- 4 Economic fluctuations, 1919–38
- 5 Exchange rate regimes and economic recovery in the 1930s
- 6 Protection and economic revival in the 1930s
- 7 Policy lessons of the interwar period
- Glossary
- Bibliography
- Index of names
- Index of subjects
4 - Economic fluctuations, 1919–38
Published online by Cambridge University Press: 04 December 2009
- Frontmatter
- Contents
- Acknowledgements
- Note on the text
- 1 Epochs in economic history, 1919–39
- 2 The exchange rate regime and UK economic performance during the 1920s
- 3 Unemployment, 1919–38
- 4 Economic fluctuations, 1919–38
- 5 Exchange rate regimes and economic recovery in the 1930s
- 6 Protection and economic revival in the 1930s
- 7 Policy lessons of the interwar period
- Glossary
- Bibliography
- Index of names
- Index of subjects
Summary
INTRODUCTION
During 1919–38 both the UK and the world economy witnessed economic fluctuations that were, in many ways, distinctly different from those of the past. Although business cycles are a recurrent phenomenon their characteristics evolve over time and reflect inter alia, the nature of specific shocks, changing policy regimes and other evolutionary changes in the structure of the economy. This chapter describes and explains the cyclical process of the interwar era and in doing so also addresses the issue of why the nature of business cycles changed in the interwar period relative to the past. The macroeconomic data that are analysed are the balanced national accounts of Solomou and Weale (1993) which represent an improvement on previous UK macroeconomic data for the interwar period (for a description of the data see appendix 1 to this chapter).
DESCRIBING BUSINESS CYCLES
Figures 4.1 and 4.2 plot the annual growth rate of GDP and manufacturing output respectively: major depressions can be observed in 1920–1,1925–6,1929–32 and less severe downturns in 1927–38 and 1937–8. Figure 4.3 plots the path of gross domestic product during the period 1870–1938: a further business cycle feature which needs to be emphasised is that, following the cyclical depression of 1921, the economy failed to return to the previous long-run path. The business cycle shocks of 1919–21 generated a persistent adverse output effect, making the analysis of economic growth and business cycles difficult to distinguish.
- Type
- Chapter
- Information
- Themes in Macroeconomic HistoryThe UK Economy 1919–1939, pp. 85 - 111Publisher: Cambridge University PressPrint publication year: 1996