Started in 1929 lasted till late 1930s or early 1940.

Unemployment was at all time high of 21.3%

Unemployment remained in double digits from 1931 to 1938
Compounded GDP growth hovered around 2.7%
Hit a low of -13% in the year 1934

GDP AND UNEMPLOYMENT DURING DEPRESSION 1929 - 1938

25.00%

21.30%
20.00%

19.80%

19.50%

18.80%

17.80%

16.60%
15.00%
14.10%
13%
12%

12%

10.00%
8.94%

5.00%

5%
4.02%

4.57%

5.02%

5%

4.61%

6%

5%
4%
3%

3%

2%

2%

1935

1936

0.00%
1926

-5.00%

1927

1928

1929

1930

1931

1932

1933

1934

-5%

-10.00%
-13%
-15.00%

Unemployment

% Change in GDP

1937

1938

World War II stared in 1939

Unemployment level hit low at 1.20%
GDP in the year 1945 twice the size as compared to the GDP
of the year 1939.
Ended in 1945

GDP and UNEPLOYMENT POST DEPRESSION BUT DURING WWII

39%
33%

17.80%

16.60%

16%

14.10%

14.60%
9.90%

4%

6%

4.70%

2%
1936

1%
1937

1938

1939

1940

1941

3.90%

1%

2%
1.90%

3%
1.20%

1.90%
1%

1%

1942

1943

1944

1945

1946

3.90%

-2%
1947

5.90%

5.30%

0%
1949

1950

3.80%
2%
1948

-10%

Unemployment

% Change in GDP

1948

1949

1980

2200

1946

2190

2190

1945

2140

2170

2140

2080

1941

2040

2010

1940

1936

1937

1080

1020

980

1500

2000

GDP IN BILLION $

1938

1939

1942

1943

1944

1947

1950

POST WW II
% change in GDP and Unemployment
8.00%

6.00%

4.00%

2.00%

0.00%
1945

1946

1947

1948

-2.00%

-4.00%

-6.00%

-8.00%

-10.00%

-12.00%

Unemployment

% Change in GDP

1949

1950

Causes for the war

Domino theory

To undermine Communism and protect the American way of life

The USA was in a competition for world domination with the USSR.

Pre War

Post war

GDP

Fell by 0.5%

11% in 1951.

Unemployment level

Reached a peak of 7.9%

Fell down and then reached a peak of

6.1% in sept 1954

GDP, consumption and investments of Korea

War & Recession

USA financing south Korea helped US to get out of its

recession period
During the Korean War, GDP was boosted by government
spending financed by taxation which constrained investment
and consumption

Main CauseTo stop spread of communism in south east Asia.

1957-61

1973-75

High level of unemployment

Rising unemployment coinciding

with rising inflation

Demand was greater than supply

High government spending leading

to stagflation in US

Change in government policy(taxcut)

1973 Oil shock

1973-74 stock market crash
A quadrupling of oil prices
by OPEC

During the war, GDP was boosted by government spending

financed by taxation and increase in inflation which
constrained investment and consumption.
The financing method of the Vietnam War via inflation did not
help policymakers who later had to deal with stagflation
brought on by the 1973 oil crisis.

Stock markets around the world crashed, shedding a huge value in a very short time.

United States economy began shifting from a rapidly growing recovery to a slower
growing expansion, which resulted in a "soft landing" as the economy slowed
and inflation dropped.

On October 14, the DJIA dropped 95.46 points (3.8%) (a then record) to 2412.70, and
fell another 58 points (2.4%) the next day, down over 12% from the August 25 all-time
high.

On Thursday, October 15, 1987, Iran hit the American-owned supertanker, the Sungari,
with a Silkworm missile off Kuwait's main Mina Al Ahmadi oil port. The next morning,
Iran hit another ship, the U.S. flagged MV Sea Isle City, with another Silkworm missile.

Reasons and causes: Iraq invaded Kuwait. This resulted in a

spike in the price of oil in 1990, which caused manufacturing
trade sales to decline. This was combined with the impact of
manufacturing being moving offshore as the provisions
of North American Free Trade Agreement(NAFTA) kicked in.
The leveraged buyout of United Airlines triggered a stock
market crash.
Duration: 8 months
Magnitude:
GDP Decline: 1.5
Unemployment Rate: 6.8%

Just after the 1987 market crash was the gulf war in the early 1990s.
The main cause of cause of the war can be traced back to the Iran
war where Kuwait made some monetary help to Iraq and at the end
of the war Iraq refused to pay back the debt.
So in order to help Kuwait fight the war, UN formed a coalition
force of 34 nations led by the United States against Iraq in response
to Iraq's invasion and annexation of Kuwait

JUST BEFORE 1990 THERE WAS

A RECESSION BUT AFTER THE
WAR THERE WAS A SMALL
IMPROVEMENT

YHTHIS REGION IS DUE TO THE

1987 FINANCIAL CRISIS

Now why did the US enter into the war can be viewed in
another aspect
It

is argued that wars can be good for economies. It

creates increased demand for military hardware, creating
jobs.
For example, many defence companies were
making a very nice profit out of building so many bombs
and tanks e.t.c.

 The internet was created by the U.S. military Commercially the internet started to catch on in 1995 with an
estimated 18 million users. The rise in usage meant an untapped market--an international market. Soon,
speculators were barely able to control their excitement over the "new economy."
The IPOs of internet companies emerged with ferocity and frequency, sweeping the nation up in euphoria.
Investors were blindly grabbing every new issue without even looking at a business plan to find out, for
example, how long the company would take before making a profit, if ever.
Internet companies went bankrupt, moved out of their fancy offices back to the garages where they
started.
In the year 1999, there were 457 IPOs, most of which were internet and technology related. Of those 457
IPOs, 117 doubled in price on the first day of trading.
In 2001 the number of IPOs dwindled to 76, and none of them doubled on the first day of trading.

9/11 The American Conspiracy Theory

Conspiracy theorists believe thatb 9/11 Attacks were ordered by the bush government.
One way to approach this question would be to ask whether these attacks brought benefits to this
administration.

President Bush himself

declared that the attacks
provide a great
opportunity.

Condoleeza Rice had said the same thing in

mind, telling senior members of the National
Security Council to think about how do you
capitalize on these opportunities to
fundamentally changethe shape of the
world.

Donald Rumsfeld stated

that 9/11 created the kind
of opportunities that World
War II offered, to refashion
the world.

 During the downfall of the DOTCOM economy, A former American think tank called Project for the New
American Century (PNAC) argued that it is necessary for defense spending to be greatly increased if the
American peace is to be maintained, and expanded.
Slow and Expensive Process
Demand of a new Pearl Harbour
The Bush-Cheney administration endorsed a document indicating that a new Pearl Harbor would be
helpful for furthering its aims and provide opportunities.

MORE THEORIES

Militarization of Space under the garb of Homeland Security

Protect American investments abroad

Attacks on Afghanistan to replace Taliban with a US friendly administration.

Economists go further. Many are now quietly suggesting that if 11 September

hadn't happened America would not have recovered so quickly from its
recession. 'On the one hand 11 September was the last thing the economy needed,
but with hindsight it may well have accelerated the healing process, awful as it was.
Talking about it from a purely economic standpoint, not from the moral or the
political, it did bring forward much of the creative destruction that recessions
wreak,' said Danny Gabay, economist with JP Morgan.

Bush administration was able to use the tragic events to get through Congress a
$1.35 trillion tax cut, something that looked inconceivable before 11 September.

The relaxation of fiscal policy - coupled with aggressive interest rate cuts by the
Federal Reserve - provided a strong, immediate stimulus to the economy. The rebate
made consumers feel wealthier - in the third quarter of 2001 some $40bn found its
way back to them - and they kept shopping, spurred on by patriotic appeals to
spend, spend, spend from the likes of Mayor Rudolph Giuliani and General Motors.