All of these factors would come into play at the start of the next …

In an essay on wartime economy, published in the Archiv für Sozialwissenschaft und Sozialpolitik, the economist Franz Eulenburg (1867-1943) tried to define what constitutes a wartime economy. Technology, like steamships, the telegraph, and the telephone, expanded global travel and communication. When the war began, the U.S. economy was in recession. In the long term, World War I was a net positive for the American economy. Although the United States was actively involved in World War I for only nineteen months, from April 1917 to November 1918, the mobilization of the economy was extraordinary. The world changed after World War I. His main argument was that a wartime economy does not follow its own unique law. It was severely handicapped by the British blockade that cut off food supplies, machinery and raw materials. (See the chronology at the end for key dates). 15 There were no limits on immigration and no need for passports. After surveying the U.S. mobilization and financing for the war, Rockoff concludes that perhaps the greatest impact of World War I was a shift in the landscape of ideas about economics and about the proper role of government in economic activities. While Germany rapidly mobilized its soldiers, it had to improvise the mobilization of the civilian economy for the war effort. But a 44-month economic boom ensued from 1914 to 1918, first as Europeans began purchasing U… The war in Europe, of course, began long before the United States entered. Instead, it is merely a “very specifically modified form of general national economy,” which has been seriously affected, directly or indirectly, by war and the tasks which a wartime economy has to fulfill. America had proved it could fight the war of production and finance and field a modern volunteer military force. Over four million Americans served in the armed forces, and the U.S. economy turned out a vast supply of raw materials and munitions. No longer was the United States a nation on the periphery of the world stage; it was a cash-rich nation that could transition from a debtor to a global creditor. Governments were small and kept their budgets balanced. Before World War I, the global economy was growing robustly.