(Foreward: I know we have already made a post about the economy of the 1920s, but we think that it is important and needs to be expanded on more in our blog, so we are making another post about it.)
The Real Gross National Product, or GNP, of the United States between 1920 and 1929 was 4.2 percent a year, and Real GNP per capita grew 2.7 percent per year, both relatively rapid rates for the nineteenth and twentieth centuries. However, the 1920s still faced economic downturns. There was a year recession between 1920 and 1921, partially initiated by the Federal Reserve’s monetary policy at the time, but rapid recovery reestablished full employment by 1923. There were two mild recessions, in 1924 and 1927, which may be related to oil price shocks, but generally from 1923 to 1929 economic growth was relatively smooth. Consumer prices fell 11.3 percent from 1920 to 1921, and fell another 6.6 percent from 1921 to 1922, but became relatively constant from 1923 onward. The impressive economic growth in the 1920s is mostly due to increasing numbers of Americans owning cars, buying new household appliances, and buying houses. These new products and the processes of producing these products drove this economic growth. The expanding use of electricity in production and the growing implementation of the moving assembly line in manufacturing combined to bring about a continuing rise in the productivity of labor and capital. The average workweek in most manufacturing, however, remained relatively the same throughout the decade; although, in a few industries, such as railroads and coal production, it declined. The new products and services, such as radios, refrigerators, electric irons, fans, electric lighting, vacuum cleaners, and other labor-reducing household appliances, created new markets for manufacturing and advertisement companies to become invested in. The stocks of those companies assisted in creating the stock market boom of the late 1920s. Radio Corporation of America, one of the most popular of the decade, paid no dividends but the value of the stock appreciated because of the public’s expectations for the young company. In other words, the electricity boom of the 1920s, paired with the generally stable prices of the decade, Americans were willing to take risks in stock, which led to the rapid expansion of the stock market. However, while overall production was growing, population growth was declining; from an annual rate of increase of 1.85 to 1.93 percent in 1920 and 1921, population growth rates fell to 1.23 percent in 1928 and 1.04 percent in 1929. The population growth decrease can be contributed to changes in the birth rates of the country’s population and a decrease in foreign immigration; birth rates fell sharply the entire decade, mostly due to an accelerated rural-to-urban migration (urban families generally had less children), and the expansion of career opportunities for women (working women generally had less children). Immigration also fell sharply, mostly due to the federal government’s limitations on immigration in 1917 and a 1921 immigration act that limited the number of immigrants allowed to become citizens of any nationality entering the U.S. to no more than 3 percent of the nationality’s resident population. Citation: Smiley, Gene. “US Economy in the 1920s”. EH.Net Encyclopedia, edited by Robert Whaples. June 29, 2004. URL http://eh.net/encyclopedia/the-u-s-economy-in-the-1920s/
5 Comments
Morgan Owens
3/15/2017 09:01:05 pm
The Roaring 20s have always fascinated me, and I liked how you guys went into a lot of detail explaining the economic side. If the uses of electricity were never discovered/implemented, how far behind do you think we'd be in this day and age?
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Linzy Crawford
3/18/2017 12:09:26 pm
I really enjoyed this blog post and thought you guys did an excellent job of making economics in the Roaring 20s easy to understand and interesting to read about. Do you think the Roaring 20s was a pivotal point for economics in the United States?
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Erin Cassidy
3/19/2017 03:44:08 pm
Your blog post fascinates me about the 20s!! I find it extremely interesting and you guys did a great job explaining the economy of the US at this time. Was social status affected by these years of economic growth?
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Mr. Ray
4/15/2017 05:27:42 pm
Overall good job with this post. As your classmates pointed out, you did a good job simplifying some complex economic concepts and made economics interesting (there's a reason its called the dismal science). Though it doesn't detract from your post, a suggestion for future posts, it always helps to clarify certain terms (describing what GNP is and how it differs from GNP per capita), as it makes it easier for all readers to understand. Lastly, the one missing piece from this post was the larger connection part like you did last time. Synthesizing probably would have been easier for this topic, but economic trends in the 1920s leave a lot of room for expansion about what that says about the United States's global position.
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Mr. Ray
4/15/2017 05:29:18 pm
Also, it's totally fine by the way, to repeat sub-topics, as long as its a different source or you analyze a different aspect of it, so doing a second posting on the economy in the 1920s is totally acceptable.
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