Why was there an economic boom in the 1920's?

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First world war

  • America's neutrality extended to a policy of fairness - American bankers could lend money to both sides in the war
  • sold arms, munitions and food to Britain and France
  • this one way trade gave the American industry a boost
  • Americans were able to take over Europe's trade around the world


  • the USA became the world's most successful chemical industries
  • explosives manufacture during the war also stimulated a range of by-products which became new American industries in their own right eg plastic

Short conflict

  • USA was not part of the war long enough to drain American resources
  • war inustries readjusted to peacetime temporarily
  • by the 1920's the American economy was growing once again



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