10 October 2016 by Sigrid Brevik Wangsness The US Economy I 10 October 2016 by Sigrid Brevik Wangsness

I. Economic History: From Agrarian Colony to Industrial Nation I. 18th Century Economic reasons for the War of Independence (1775-1783) Agriculture as the main economic activity  

2. 19th Century   The Industrial Revolution and development of a modern economy How can we explain the tremendous growth of the US economy since the early 19th century? 1 6 2 7 3 8 4 9 5 10

«From Rags to Riches» – The Self-Made Man Focus on opportunity to succeed through: 1. 2. 3. 4.

A Case Study: Andrew Carnegie Poor immigrant from Scotland From factory worker to one of the richest men in the world Founded a steel company, consolidated the steel industry A philanthropist

3. 20th Century Development of corporations Why did corporations replace many family businesses and partnerships in the US? How did the giant corporations develop? Consolidation in major industries: oil, steel, railroads  

The Role of the US Government in the Economy To what extent did the US government intervene in the economy in the 20th century?  1. Early 20th century Tariffs Trust busting 1913: The Federal Reserve (The Fed)

The Role of the US Government in the Economy 2. The Roaring 20s Growth in mass production and consumption Prohibition Speculation on the stock market 3. The crash in October 1929 Why? 4.The Depression of the 1930s 25% unemployment, extreme poverty

The Role of the US Government in the Economy 5. The New Deal The election of Franklin D. Roosevelt in 1932 Creating jobs Social Security Regulation of finance The SEC The three Rs: Relief Recovery Reform

The Role of the US Government in the Economy Roosevelt was influenced by a new economic theory: A managed economy John Keynes: The General Theory of Employment, Interest and Money (1937)

The Role of the US Government in the Economy 6. World War II Government control of large parts of the economy Full employment Consensus   7. The Post-War Period How has Big Business profited from co- operation with the US government?

II. Developments in the U.S. Economy after 1945 Major growth of the US economy from 1945-1970 World economic dominance Sustained growth in the 50s and 60s Consolidation in the 60s

III. Developments in the U.S. Economy since the 1970s Mid-1970s: Stagflation and recession   New economic theory: Monetarism Milton Friedman – the ”Chicago school” of economics ”Supply-side” economic theory (1970s/80s)

The 1980s 1980s: The decade of the Yuppies   Economic growth, but at a slower pace towards the end of the period. Ronald Reagan: 1980-88

Major changes: Continued shift in the workforce from manufacturing to services and high-tech. Declining number of workers, but increased production and efficiency. Development of conglomerates and multinationals.

Major changes: From being the world’s biggest creditor the US became the biggest debtor. Foreign investment inside the USA became greater than US investment abroad. Deregulation: fewer restrictions and less government intervention  1987: Stock market crash. World recession

The 1990s: The Longest Boom in US History 1990 - 1992: Recession. George Bush Sr. Signs of recovery at the end of his term. 1993 - 2000: Growth. Boom. Bill Clinton. Eight years of uninterrupted growth. Signs of decline at the end of his term.

The First Years of the 21st Century   2000/2001: "The new economy” (dot.com shares) "A bubble economy”? The IT bubble burst: Prices of IT shares dropped dramatically A major slowdown of the US economy Sectors of the economy sliding into recession

The First Years of the 21st Century September 11th 2001 2002 - early 2003: Signs of recovery, but sluggish 2003 - 2007: Relative growth (GDP: 2.6% in 2007), stability and relatively low unemployment (4.7% in 2007).  

The First Years of the 21st Century 2008 – 2009: Financial crisis. Recession 2009 - 2013: Slow recovery 2014: 2.5% growth, but economic data difficult to interpret. 2015-2016: Better than it looks?