Existence of the Industrial Revolution. Term Paper

Generally, the European economy was characterized by the following aspects:

The development of the economic activity's industrial side, not only in Western Europe but also in other countries previously considered to be exclusively agrarian. The industry and services presented the highest increases, and the gap between labor productivity in agriculture and the one in industry significantly increased

The Eastern and South-Eastern European countries' economic evolution suffered important transformations, with quantitative and qualitative restructurings

Maintaining the inequalities between European countries, given their distinct evolution

The heterogeneity of options regarding European development strategies

It is considered that the war delayed the European economy's evolution with approximately 8 years, which means that the 1929 production quantum might have been attained in 1921 if it had not been for the war and if the growth rates before 1913 would have been maintained (Kennedy, pp 361).

2.2. The Great Depression and European Economy's Post-crisis situation

The Great depression that took place between 1929 and 1933 was a global phenomenon that manifested with various intensity levels in each country. During this period, word's economy was simultaneously confronted with the financial crisis, the production and trade crisis, and the social crisis.

In the 1920's the international economic system was characterized by instability because Great Britain and the U.S.A. did not take responsibility of stabilizing on three precise directions: maintaining an open market for goods without suppliants; supplying long-term credits; and reducing the crisis's size (Kindleberger, pp 292). Others consider that Great Depression was influenced by overinvestment and that the 1920's were not an inflationist decade (Friedman & Schwartz, pp 298).

The economic depression generated high unemployment rates, reaching 15% or 20%. In Western Europe, unemployment reached 15,000,000 in 1932. When the crisis was over, despite all measures meant to counteract unemployment, it was still reaching 30% in Germany and 22% in Great Britain.The employment crisis was a general trend all over Europe, but the impact was smaller in France and Italy compared to Great Britain and Germany.

The international trade collapsed and followed an implacable spiral that led to the collapse international exchanges' value three times between 1929 and 1933. The lowest physical level of international trade was reached in 1932, when the crisis hit its top, while the lowest value of international trade was reached in 1934, in the depression phase that followed the crisis.

The contraction of global exchanges generated by the American depression has especially affected the Japanese, British, and German economies that depended on the external trade. Between 1929 and 1932, the world trade decreased up to 25%.

Once the crisis hit London, the main financial relay between the U.S.A. And the rest of the world, the crisis became global. In September 1931, the British government was forced to abandon the Gold Exchange Standard System. A vicious circle followed: general contraction of markets, reduced production, increased unemployment that generated a new demand decrease, and others.

The British economy handled the depression's shock better than the German one did, very rationalized and dynamic throughout the 1920's. The French economy that was less dependent on the international market of goods and capital, was hit later and less brutally, but for a longer period of time than other economies.

Less developed European countries, that were already vulnerable to any changes, were ruined by the collapse of primary products' prices. Given the existing gaps between European countries, the crisis manifested in different intervals and with different intensities.

The Great Economic Depression that hit Europe in 1930 inaugurated a long period of shutting spaces that lasted until 1945. All over Europe, economies were reduced to a national level,.....