1. 10 October 2016 by Sigrid Brevik Wangsness
The US Economy I
10 October 2016 by
Sigrid Brevik Wangsness

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

3. 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?

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

5. 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

6. 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

7. 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)

8. 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

9. 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

10. 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)

11. 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?

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

13. 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)

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

15. 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.

16. 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

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

18. 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

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

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