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Inter–War Economy - The Depths & The Recovery

The First World war was fought between two major powers, namely the Allies consisting of Britain, France, Russia and the US; and the central Power consisting of Germany, Austria-Hungary and Ottoman Turkey.

The First World War was like no other war fought until then. Machine guns, tanks, aircrafts and chemical weapons were used on a large scale. Millions of soldiers had to be recruited and millions of people died. As those who died were of the working age, family income dwindled. Industries started producing war related goods and entire societies were reorganized for war.

Workers in an Ammunition Factory during the First World War


The war led to the snapping of economic links. The war had an adverse economic impact on Britain, which borrowed heavily from the US, transforming the US from being an international debtor to an international creditor. The US slowly started emerging as a super power.

The post war recovery seemed difficult for Britain, though the recovery was quicker for the US. The war had created a temporary economic boom which ended after the war creating unemployment and anxiety. Wheat production declined in Europe due to the war and the centre of wheat cultivation slowly shifted to Canada, America and Australia.

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