Question

Why was there a recession after WW1?

Answer 1

Because after the war governments had no money and could not spend to stimulate the economy. the end of the war time production along with increased labor supply from returning troops helped contribute to high unemployment and the decline of wages

Answer 2

Answer:

After the war, governments had no more money, and could not spend to stimulate the economy. The end of the war time production along with increased labour supply from returning troops helped contribute to high unemployment and the decline of wages. Factories producing war related products were becoming idle. Factors identified as contributing to the downturn include returning troops, which created a surge in the civilian labor force and problems in absorbing the veterans; a decline in labor union strife; changes in fiscal and monetary policy; and changes in price expectations. World War I took the United States out of a recession into a 44-month economic boom. ... After the war, it became a lender, especially to Latin America. U.S. exports to Europe increased as those countries geared up for war. Later, U.S. spending increased as it prepared to enter the war itself.

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