What Happened To The U.S. Economy After WW1 Ended?

Short & Quick Answer:

The United States of America enjoyed massive economic growth after WW1.

The main two reasons are:

1. Reason One: Massive export to Europe, because almost entire Europe was devastated due to the war and hence, the US had to export their necessary goods. In other words, the war became an opportunity for the United States of America. Most American companies made a lot of profits via exports.

2. Reason Two: The US provided a large number of credits to the war-affected European countries. Such as Great Britain, France, Germany, etc. Later, the country also made a lot of profit from the loans’ interests. 

Read the explanation in the following. 

It was true that the First World War came like a curse for Europe, Asia, and the whole world.

But this war became a blessing for one country’s economic side and that was the United States of America.

But why?

Because the global conflict led the country to a huge economic boom.

Before the war, the United States of America was a country that took loans from other nations for running its own economy; but the war transformed them into the most powerful lender in the world.

Two main reasons worked behind their rapid economic growth during and after the global crisis.

They are:

1. Massive Export To Europe

Before the war broke out, Europe was the manufacturing center of the entire world.

Using mercantilism policies over different colonies throughout the world, powerful countries from this continent made a lot of money (Via selling their goods). 

At that time, countries like Great Britain, France, Ottoman Empire, Germany, Austro-Hungarian Empire played a leading role in the manufacturing field.

They were the major controllers of the world’s export.

From food to cloth, everything they produced and exported to the other countries of Europe, Asia, Africa, and the American continent.

But the whole of Europe was almost transformed into a carcass due to the war.

Almost all the manufacturing factories which used to be here are now start being closed. Because of this reason, the problem started to meet the needs of people in Europe.

The United States took full advantage of this problem.

The manufacturing factories that were being tied up there, now opening up in the United States in large numbers.

They geared up their production and started exporting goods and services at a massive level to the entire European continent.

Within a few years, their economy boomed up for this reason.

Somewhere, we have found that the USA’s economy kept booming for 44 consecutive months during that time.

2. The United States Became The Most Powerful Lender

The Axis side spent almost 280 billion dollars during the whole war and the Allies spent around two times of the Axis power.

From the Axis side, Germany spent the highest amount of money and from the Allies’ side, Great Britain and France spent the highest amounts.

All these countries had gone bankrupt due to the massive losses caused by the Great war. Although, from 1917 to 1918, the United States spent a significant amount of money.

Once the crisis was over, these countries had to take huge loans to rebuild their economies.

And here, the United States came further to provide them with heavy loans at high-interest rates.

The United States also benefited greatly from these loans. As a result, it aided to boost their economy.

Not only in Europe, but after this, the United States had become a major lender in Asia and South American countries too.

So, these were the two main phenomena that happened to the U.S. economy after WW1 ended. 

I hope, the answer remained helpful to you. 

Post–World War I Recession To The US Economy

After World War 1, many countries around the globe faced economic recession.

However, the war was not alone responsible for this decline, because in 1918 Spanish flu also killed many businesses.

The recession hit the United States for only seven months, from August 1918 to March 1919.

Although, the recession didn’t create much negative impact on the US economy.

Interesting Economic Facts of World War 1 & The United States

1. Did you know? Before World War 1, in 1914, the unemployment rate in the United States was 16.4 percent, till 1918 this percentage was reduced to 5.5 percent.

From here, we can easily understand that the Great War greatly benefited the country.

2. Did you know? The United States of America spent around 27 billion dollars in just one year of involvement in World War 1.

The United States entered in 1917 declaring war against the German Empire.

3. Did you know? During the period of World War 1, a large population of American Blacks migrated to the northern and western states of the country.

They mostly migrated to the northern states to work in newly formed factories. Factory owners hired them because of low wages.

Till 1914, around 92 percent of Black people lived in the southern states; they were illiterate and poor.

But till the 1970s around half of the population migrated to the northern and western states. The economic boom significantly changed their lives.