Post–World War I recession
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The post–World War I recession was an economic recession that hit much of the world in the aftermath of World War I. In many nations, especially in North America, this growth continued during World War I as nations mobilized their economies to fight the war in Europe. After the war ended, the global economy began to decline. In the United States, 1918–1919 saw a modest economic retreat, but the next year saw a mild recovery. A more severe recession hit the United States in 1920 and 1921, when the global economy fell very sharply.
In North America, the recession immediately following World War I was extremely brief, lasting for only 7 months from August 1918 to March 1919. A second, much more severe recession, sometimes labeled a depression, began in January 1920. Several indices of economic activity suggest the recession was moderately severe. The Axe-Houghton Index of Index of Trade and Industrial Activity declined by 14.1% in this recession (compared to a 31% decline in the Panic of 1907). The Babson index of physical volume of business activity declined by 28.6% in this recession (compared to a 2.3% decline in the 1921 recession and a 22.7% decline in the Panic of 1907).[clarification needed]
In Germany, the economic recession and inflation was harder due to the imposition of the Treaty of Versailles. A period of hyperinflation severely devalued the Mark and nearly crippled the German economy.