21 September 2015 by Sigrid Brevik Wangsness

I. 18 th Century  Economic reasons for the War of Independence ( )  Agriculture as the main economic activity

 The Industrial Revolution and development of a modern economy  How can we explain the tremendous growth of the US economy since the early 19 th century? 16 The free-enterprise system (Adam Smith) 

 Focus on opportunity to succeed through:

◦ 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

 Development of corporations a) Why did corporations replace many family businesses and partnerships in the US? b) How did the giant corporations develop? b) Consolidation in major industries: oil, steel, railroads

 To what extent did the US government intervene in the economy in the 20 th century? 1. Early 20 th century o Tariffs o Trust busting o 1913: The Federal Reserve (The Fed)

2. The Roaring 20s o Growth in mass production and consumption o Prohibition o Speculation on the stock market 3. The crash in October 1929 o Why? 4.The Depression of the 1930s o 25% unemployment, extreme poverty

5. The New Deal o The election of Franklin D. Roosevelt in 1932 Creating jobs Social Security Regulation of finance o The three Rs: Relief Recovery Reform

 Roosevelt was influenced by a new economic theory: A managed economy  John Keynes: The General Theory of Employment, Interest and Money (1937)

6. World War II o Government control of large parts of the economy o Full employment o Consensus 7. The Post-War Period  How has Big Business profited from co- operation with the US government?

 Major growth of the US economy from  World economic dominance  Sustained growth in the 50s and 60s  Consolidation in the 60s

 Mid-1970s: Stagflation and recession  New economic theory: Monetarism  Milton Friedman – the ”Chicago school” of economics  ”Supply-side” economic theory (1970s/80s)

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

 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.

 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

 : 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.

 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

 September 11 th 2001  early 2003: Signs of recovery, but sluggish  :Relative growth (GDP: 2.6% in 2007), stability and relatively low unemployment (4.7% in 2007). 

 2008 – 2009: Financial crisis. Recession  : Slow recovery  2014: 2.5% growth, but economic data difficult to interpret.  2015: Better than it looks?