The Great Boom
Western Europe slipped from the period of reconstruction into an unprecedented boom, but observers adjusted to the new situation rather slowly. By 1948 or 1949 industrial output in all countries already exceeded its prewar level, but growth rates were expected to drop once the ‘recovery phase’ ended. In 1950 and 1951 the Korean War created a sudden worldwide increase in demand for raw materials and machinery, but this was regarded as a temporary phenomenon. American pressure for rearmament further stimulated demand, but in the absence of cuts in consumption the continued boom was generally seen merely as dangerously inflationary. By the late 1950s the boom showed no sign of ending, and economists began to turn to their shelves for copies of works offering explanations of long periods of economic growth. The boom persisted through the 1960s. It was interrupted on four occasions, in 1952, 1956–58, 1963 and 1967. However, these interruptions were not traditional ‘depressions’, but ‘recessions’, years in which output continued to grow, but at rates somewhat lower than those which Europeans came to see as ‘normal’. In 1958 total output declined in Belgium, Eire and Norway; these were the only three cases in which output declined in any western European country during any of the four recessions.
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