Innovation
Swedish Economic Development - Lecture 7
The 1920s
United States shifted from being an IMPORTER of capital to an EXPORTER
First half of the 1920s was wanting to make Germany pay. Germany’s resistance resulted in hyper inflation in Deutschland.
USA’s solution The Dawes plan(1924) loans to finance the german reparations; transmitted thru int finance networks (kreuger)
In Sweden, Kreuger borrowed money directly from wall street
European govts deeply indebt.
** first half of the 1920s was wanting to make Germany pay. Germany’s resistance resulted in hyper inflation in Deutschland
The Great Depression
Stock market fell from 200 – 35
Fall in px of agricultural products and raw materials
Result This triggered protectionism
World trade fell by 50% from 1929 to 1932
The smoot-harley triff (June 1930)
Financial Crises
Credit –anstaly (Austria) 1931 resulted in many eastern european countries defaulting due to the old ties to the Hapsburgs;
The Greuger affair (Sweden) 1932
Sweden in the Great Depression
Unemployment in Sweden was less and not affected so greatly.
WHY ?
Why wasn't Sweden so severly hurt by the Great dep?
She was a late comer and hence not as deeply involved in coal-steel complex as many other countries
Swedish industrialization was based on the GPTs of the second industrialization
Sweden was more involved in tecg from the second indus revolution diminishing returns ?? huh
Essentially latecomer more involved in second industralisation industries not that affected
Why did Sweden recover relatively quickly?
Expansive Financial policy
Keynesian idea was introduced the Keynesian concept of INJECTIONS
Subsidies fror the agrarian sector.
Diff between Keynesian and neoclassic if we increase the money more resources will be available.
Expansive monetary Policy
Sweden followed Britain off the gold standard in 1931 = depreciation of the krona
** KRONA was also
The 1920s
United States shifted from being an IMPORTER of capital to an EXPORTER
First half of the 1920s was wanting to make Germany pay. Germany’s resistance resulted in hyper inflation in Deutschland.
USA’s solution The Dawes plan(1924) loans to finance the german reparations; transmitted thru int finance networks (kreuger)
In Sweden, Kreuger borrowed money directly from wall street
European govts deeply indebt.
** first half of the 1920s was wanting to make Germany pay. Germany’s resistance resulted in hyper inflation in Deutschland
The Great Depression
Stock market fell from 200 – 35
Fall in px of agricultural products and raw materials
Result This triggered protectionism
World trade fell by 50% from 1929 to 1932
The smoot-harley triff (June 1930)
Financial Crises
Credit –anstaly (Austria) 1931 resulted in many eastern european countries defaulting due to the old ties to the Hapsburgs;
The Greuger affair (Sweden) 1932
Sweden in the Great Depression
Unemployment in Sweden was less and not affected so greatly.
WHY ?
Why wasn't Sweden so severly hurt by the Great dep?
She was a late comer and hence not as deeply involved in coal-steel complex as many other countries
Swedish industrialization was based on the GPTs of the second industrialization
Sweden was more involved in tecg from the second indus revolution diminishing returns ?? huh
Essentially latecomer more involved in second industralisation industries not that affected
Why did Sweden recover relatively quickly?
Expansive Financial policy
Keynesian idea was introduced the Keynesian concept of INJECTIONS
Subsidies fror the agrarian sector.
Diff between Keynesian and neoclassic if we increase the money more resources will be available.
Expansive monetary Policy
Sweden followed Britain off the gold standard in 1931 = depreciation of the krona
** KRONA was also