Critically examine the hypothesis that economic recovery in the 1930s was based upon the expansion of new trades and industries

This essay hasn't yet been marked by one of our teachers

You can view 4 essays on Macroeconomics that have been Marked by Teachers

The first 200 words of this essay...

Critically examine the hypothesis that economic recovery in the 1930s was based upon the expansion of new trades and industries

This essay will argue that economic recovery in Britain was not initially based upon the expansion of new industries, which only brought growth after 1933. It was in fact initiated by the housing boom in 1932. Therefore we shall argue that economic recovery was only based on the expansion of new trades post-1933.

Taking 1929 as a base year with real GDP of 100.00, it was not until 1932 that Britain's real GDP finally began to increase, having reached a low of 94.4 in 1931. It was only by 1934, however, that Britain reached the level of national output attained in 1918, with a real GDP of 102.8. In the period 1932-1937, the UK experienced real GDP growth of 4% on average. In comparison, the real GDP in the US grew by 8% per annum in 1933-1937; the British recovery appears to have been milder, although the recession itself was also much less severe in the UK. The causes of this recovery can be in part attributed to 'cheap money', resulting from Britain's abandonment of the Gold Standard