ABSTRACT
This chapter considers the state of the world economy throughout the 1920s, beginning with an examination of how German war reparations affected not only that country's economy but the world economy more widely. In the 1920s the gold standard appeared to some a mighty fine house of cards, but there was a strong breeze ahead. The gold standard trade-off was essentially between price stability and levers of monetary policy. The chapter also considers the American economy, closely associated with popular notions of the twenties prosperity, along with the wider global picture from South American oil to intra-Asian immigration. Japan was becoming more open to the global economy then, and part of this involved selling cloth to the then British colony of Nigeria in West Africa. Economies were far less explosive in their growth: the British economy was in the doldrums after the return to the gold standard, while the French economy underwent significant inflation and capital flight following political controversies.
