Inter-war Period Economy

Definition

The Inter-war Period Economy refers to the economic landscape and challenges faced by countries between World War I and World War II, specifically from 1918 to 1939. This era was marked by significant fluctuations in economic stability, characterized by the aftermath of the Great Depression, rising unemployment rates, and shifts in trade policies. The interplay between these factors created an environment ripe for political upheaval and social change.

5 Must Know Facts For Your Next Test

1. The Inter-war Period saw a dramatic rise in unemployment rates, peaking during the Great Depression when millions lost their jobs globally.
2. Many countries turned to protectionist policies in response to economic struggles, which exacerbated global economic conditions and hindered international trade.
3. Germany experienced hyperinflation in the early 1920s, particularly affecting the Weimar Republic, which led to severe economic instability and social unrest.
4. The New Deal in the United States was a series of government programs and reforms implemented by President Franklin D. Roosevelt aimed at providing relief and recovery during the Great Depression.
5. The economic struggles of the Inter-war Period contributed to the rise of totalitarian regimes, as many citizens sought strong leadership amidst chaos and instability.

Review Questions

• How did the Great Depression influence economic policies around the world during the Inter-war Period?
  • The Great Depression had a profound impact on economic policies globally during the Inter-war Period. Countries faced skyrocketing unemployment and plummeting production levels, prompting many governments to implement interventionist policies. These included public works programs and monetary stimulus aimed at reviving economies. However, instead of fostering international cooperation, nations often resorted to protectionist measures that worsened the global economic situation.
• Evaluate the effects of hyperinflation in Germany on its economy and society during the Inter-war Period.
  • Hyperinflation in Germany during the early 1920s led to devastating effects on both its economy and society. The rapid devaluation of currency caused savings to become worthless, obliterating middle-class wealth and creating widespread discontent. As a result, many citizens lost faith in democratic institutions, paving the way for extremist political movements like the Nazi Party, which promised stability and a return to national pride.
• Analyze how the economic turmoil of the Inter-war Period contributed to political changes in Europe leading up to World War II.
  • The economic turmoil of the Inter-war Period significantly shaped political changes across Europe, ultimately setting the stage for World War II. Economic hardships such as high unemployment and inflation fostered discontent with existing governments. Many citizens turned to authoritarian leaders who promised quick solutions, such as Adolf Hitler in Germany and Benito Mussolini in Italy. This shift towards totalitarianism destabilized European politics and contributed directly to aggressive expansionist policies that led to global conflict.

Related terms

Great Depression:

A severe worldwide economic downturn that began in 1929 and lasted through the 1930s, resulting in widespread unemployment, business failures, and deflation.

Protectionism: An economic policy that restricts imports to protect domestic industries from foreign competition, often implemented through tariffs and quotas.

Hyperinflation:

An extremely high and typically accelerating inflation rate that drastically erodes the real value of currency, often leading to a loss of confidence in the economy.