Introduction Essay

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Cambridge University Press 0521801699 - Monetary Regimes of the Twentieth Century Andrew Britton Excerpt More information Introduction: economics and history This is a book about both history and economics. As a history book, it describes, in chronological order, the main monetary ‘events’ of the twentieth century, concentrating on the five major economies – the United States, the United Kingdom, Germany, France and Japan. The century is divided into eight periods of ten to fifteen years, and a chapter is devoted to each of them. Each chapter begins with a section that describes the behaviour of the major economies in respect of inflation, output growth, unemployment and interest rates. A very broad overview of the century is provided by figures 1–4 at the end of this introduction (pp. 21–2). At the beginning of the century inflation was low everywhere. In both world wars, and immediately after them, it was high, sometimes very high indeed. Between the wars it was sometimes negative. In the latter half of the century it was persistent, but not explosive. Towards the end of the century it was again generally low. Growth rates varied greatly from year to year in the first half of the century. In the interwar period, output fell continuously for four years in America. There were recessions in the latter half of the century as well, but they were not so long, or so deep. The peak rate of unemployment in the 1930s was much higher in America (and in Germany) than it was in Britain. Full employment was maintained in Europe for a generation after the Second World War. In the last two decades of the century, however, the rate was persistently higher in Europe than in the USA. Interest rates remained low throughout the first half of the century, showing far less variation than there was in rates of inflation. 1 © Cambridge University Press www.cambridge.org

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