What Caused the Roaring Twenties?


In a prior post (here), I took a Systems Theory perspective to defining the Great Depression. From that perspective, there really wasn't a Great Depression, as such, but rather an Economic Bubble that started with World War I (WWI) and ended when the Bubble was popped by the Stock Market Crash of 1929. This leaves open the question of what caused the Bubble, a topic I address in this post.


The Economic Bubble of the Roaring Twenties was caused by forces in the US. The primary forces were the usual culprits: Unemployment-Business Conditions and the Stock Market Crash. The Bubble would have been eliminated by linking the US to the World System.

In this post, I look in more detail at what caused the Bubble and how the Bubble could have been prevented.




Notes



WE20 Measurement Model

W5 = (0.7043Q-0.599N-0.355XREAL)  

W6 = (0.2178Q+0.537N-0.7976L)


USGD Model W Input


Preventing the crash would have involved following the unfolding Malthusian Crisis in Europe after WWI (unlikely)


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