Britain devalues and starts an international realignment of exchange rates

The Marshall Plan

General George Marshall proposes a huge program to assist reconstruction of war-torn Europe.

The Bretton Woods agreement

The agreement envisages a system of convertible currencies, fixed exchange rates, and free trade..

Second World War

Keynesian policies are put to the test as the British government borrows larger sums than ever before. From being a large creditor Britain becomes a large debtor. In the US, the national debt increases from US$ 16 billion in 1930 to US$ 269 in 1946. Nevertheless, the US gross national product rises substantially while the economies of most European countries are devastated.

Roosevelt becomes US President and launches his New Deal

US and France hold 75% of world's gold stock

Britain abandons the gold standard

This marks the beginning of the move from classical to Keynesian economics.

Bank for International Settlements founded

Its initial task is to help with reparations and with large financial transfers for reconstruction. Later it plays a key role as forum for central bankers.

The Great Depression

Widespread bank failures and the surviving banks' curb on lending cause businesses of all kinds to go bankrupt. The US national product falls by half.

The Great Crash

The New York stock market crashes on October 24. The Fed, whose easy money supply stoked the boom, now tightens credit causing a slump in the US economy.

Florida land boom

Massive speculation in land in Florida is halted by devastating hurricanes in September 1926. Subsequently the interest of speculators moves to the equity market.

Germany suffers from hyperinflation

First World War

Japan's industry is greatly stimulated by the war. By 1918 Japan has passed from being a debtor to a creditor country.

US Federal Resserve System established

International bank crisis starts in New York