Chapter

The Long Interval Without Major Recession, 1945–1973

Christopher Dow

in Major Recessions

Published in print October 2000 | ISBN: 9780199241231
Published online November 2003 | e-ISBN: 9780191596179 | DOI: http://dx.doi.org/10.1093/0199241236.003.0007
 The Long Interval Without Major Recession, 1945–1973

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The quarter‐century or so after World War II was a period when growth was relatively fast, demand was high, and unemployment was low, and when there were no large fluctuations as defined in this book; it is referred to as the Golden Age, and raises large questions of a sort central to the purpose of the book. Section 7.1 gives an overview of the period, and Sect. 7.2 then considers the main questions raised: what caused fast growth and high demand to continue for so long, or prevented small recessions from developing (as in other periods) into big ones; were the conditions that produced the Golden Age simply exceptional in the history of developed economies and something we are unlikely to see again; and if so what did this lucky chance consist of? While there were no large fluctuations, there was a succession of small ones, and in Sect. 7.3, these are compared with the larger fluctuations that occurred in other periods, and the question of whether they were due to mistaken policy or to something more basic is looked at. Section 7.4 comes back to the larger issues: did this Golden Age contain within itself the seeds of its own destruction; were there developments in the period (such as accelerating inflation, or the flagging of investment demand) which would have brought the long period of fast growth and high demand to an end without an exogenous shock? Finally, Sect. 7.5 draws some general conclusions about the behaviour of the economy.

Keywords: demand; economic growth; economic policy; fluctuations; Golden Age; history; inflation; investment; recession; unemployment

Chapter.  15229 words.  Illustrated.

Subjects: Macroeconomics and Monetary Economics

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