Business Cycles in the Progressive Era and New Deal
Warren G. Harding ran for president of the US in 1920 on the promise of a return to normalcy. If by normalcy he meant a return to economic prosperity, he delivered. The 1920s were a period of economic growth and prosperity never seen before in the US. The Federal Reserve index of industrial production went from 81 in January 1920 to 114 in July 1929 – a 40.6 per cent increase; real income grew at an average of 4.6 per cent a year from 1920 to 1929 (Parker 2007, p. 2), and 1929 was the best year the US economy had experienced up to that time. Economic recessions were common during the 1920s. The first began in January 1920 and a recovery did not begin until July 1921; other recessions took place from May 1923 to July 1924, October 1926 to November 1927 and the final downturn began in August 1929. These recessions took up 52 months of the ten-year period. In addition to being a decade of economic growth, the 1920s were also a decade of economic transformation, brought about by the development of new technologies in production and in product development. The automobile came of age in the 1920s, and the radio and films launched new industries. A contemporary estimate by Joseph Schumpeter found that 90 per cent of the change in economic activity in the 1920s came from the automobile, chemical and electrical industries (Schumpeter 1964, p. 305). As a result, economic conditions in the US were very good.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.