Postwar Era, pg 3
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samclements on April 5, 2011
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7 terms
Terms | Definitions |
|---|---|
 EUROPEAN RECOVERY PROGRAM | Proposed by George Marshall, US Secretary in 1947. He'd been Chief of Staff of Military in WWII. Proposed this plan in an address at Harvard. Basically recommending large infusion of American financial aid to the European nations to help them recovery economically from the devastation of war. This would satisfy American humanitarianism, serve American economic needs since American industry needed markets and would only benefit from improved international trade, and it would also reduce the risk of drift into Communism. By 1948 18 European states (excluding Spain, Russia and its allies) formed... |
| OEEC | Organization for European Economic Cooperation for purpose of rebuilding, increasing productivity and reducing tariff barriers. OEEC was a naturally offshoot of the Marshall Plan. Offices were in Paris. Identified projects, planned and coordinated activities. This and the Marshall Plan would have a profound effect on morale and economic recovery. Exceeded all expectations. An accelerated recovery was well underway by the late 1940s and this indeed proved a boost to the US economy. |
| "MIXED ECONOMIES" or "SOCIAL MARKET ECONOMIES | " In Britain, France and Italy in the postwar period there was nationalization(govt ownership and management)of key industries as part of govt assistance to recovery. BUT, the private sector was still dominant. Economic growth became the central objective - a virtual obsession. However, the govts also continued to provide basic welfare benefits to citizens. Hence, they were not exactly "FREE MARKET ECONOMIES" in the traditional sense but neither was it pure socialism. Therefore known as Mixed Economies/Social Market Economies. Currently, they are still of this type. |
| JOHN KEYNES | an economist. His theories were first formulated in the 1930s in response to the Great Depression. He did not have too many followers at that time but made converts in the postwar period and influenced govt policies in the 1950s and 1960s - even at times when Conservative govts were in power. He advised govts keeping economies under close surveillance and using fiscal(budgetary) and monetarist powers(control of money supply through interest rates etc) to promote investment, production and employment and to control inflation. (When govts do these things today - and they often do - we refer to them as Keynesian or monetarist measures). Keynes recommended that govts should take... |
| COUNTERCYCLICAL MEASURES | At times of economic decline govts should spend to keep the demand for product and services high. Full employment should be the goal. Economist recognized that the business cycle was full of ups and downs but suggested that the responsible govt should moderate these and something like the Great Depression should not be allowed to happen again. |
| "FINE TUNING | " Improved statistical techniques and economic forecasting made this much more feasible. Govt departments produce "economic indicators" on a quarterly and often monthly basis. This type of govt involvement is still VERY DIFFERENT from the highly rigid Soviet doctrines followed by Gosplan and the Five Year Plans. Keynesian economics implied guidance and direction NOT coercion. |
| WIRTSCHAFTSWUNDER | translates to "economic miracle." The German currency reform of 1948(the same one that triggered the Berlin Blockade) in fact ignited an amazing economic revival and expansion. It began to take place in Germany under occupation by former allies, but once the Federal Republic of Germany was established it joined the OEEC. The Korean War led to an increase in demand for American goods which stimulated an economic boom. By 1958 Germany had become one of the leading industrial nations of Europe. Note: there is also some benefit to be had when industry is totally destroyed in a war since the rebuilt industrial base is of the latest technology. Both German and Japan benefitted in this way. Other European countries had economic miracles at this time too. 1948-1974 were years of economic growth - the Silver Fifties. |
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