The pre-1913 world economy grew along a non-steady and non-balanced growth trajectory. Kuznets swings were a generalised growth pattern for the four national economies under consideration. Although the world economy did not grow along a Kondratieff wave, there is evidence of a long-run G-wave growth path (see Chapter 3). In France and America a long-swing pattern of growth is also observed for the interwar years. Given the critical role of America in the performance of the world economy during this period, a longswing perspective of the 1930s depression warrants further study. Moreover, understanding the long-swing aspects of growth will help to situate the initial conditions of national growth trajectories.

Long-term economic growth trends

The interwar years are generally grouped together as an era of retarded economic growth. This is a view that is shared by Bieshaar and Kleinknecht (1984), Van Duijn (1983), Svennilson (1952) and Maddison (1982). The argument of this chapter is that such a perspective hinders our understanding of the interwar years by hiding significant differences between the growth paths of the 1920s and 1930s.

As can be seen from Table 8.1, with a few major exceptions, much of the world economy recovered successfully from the First World War growth shock. The significant exceptions were Germany and Britain. The world economy, as measured by Maddison's sample of sixteen capitalist countries, grew at 2.7 per cent per annum during the period 1872–1913 and only 2.2 per cent per annum during the period 1913–29.