Economics Notes > University Of Birmingham Economics Notes > Economic History of Modern Britain Notes

Britain In The International Economy Notes

This is a sample of our (approximately) 3 page long Britain In The International Economy notes, which we sell as part of the Economic History of Modern Britain Notes collection, a 2.1 package written at University Of Birmingham in 2012 that contains (approximately) 31 pages of notes across 12 different documents.

Learn more about our Economic History of Modern Britain Notes

The original file is a '' whilst this sample is a 'PDF' representation of said file. This means that the formatting here may have errors. The original document you'll receive on purchase should have more polished formatting.

Britain In The International Economy Revision

The following is a plain text extract of the PDF sample above, taken from our Economic History of Modern Britain Notes. This text version has had its formatting removed so pay attention to its contents alone rather than its presentation. The version you download will have its original formatting intact and so will be much prettier to look at.

Lecture 4 - Britain in the International Economy: 1919-39 Trade, finance and the Gold Standard Decline of internationalism GB economy les s integrated with the rest of world by 1939. Between wars less integration, before there is more.

• 1913 international trade and services 30% GDP (doesn't exceed this until after WWII), up to 15% by 1938

Causes of trade decline Reflective of slow growth in world trade (1930s mainly), although world output did grow faster than world trade between the wars. Reflective of a loss in market share; most significant in manufactured good making up the bulk of GB exports.

• Share in manufacturing world trade. (GB) 1913 - 29.9% to 22.4% in 1937. (USA) 1913 - 12.6% to 19.6% in 1937. Main period of fall is 1920s

Invisible Trade Income from such trade becomes less important, as shipping income declines as world trade reduces. Overseas investment

• Declines with new overseas loans in 1920s before practically stopping in the 1930s. Diminishing B of P surplus reduces funds available for overseas investment. o Before 1914 net GB capital exports of c.£200m per year, down to c.£100m in

1920.

• GB no more a major capital exporter.

Gold Standard The change in the GB economy was unexpected in 1918, assumption that prosperity depends on international trade and finance. The situation before 1914 was seen as the norm BUT this requires free trade and the Gold Standard which had 2 requirements:

• Currency freely convertible into gold.

• Convertible at a fixed rate 1870-1914 all major currencies were on the gold system -fixed currency system (£1 always
$4.86). GB on GS pretty much always except from Napoleonic wars. 1914-19

• War badly disrupts gold standard - it basically stops. o Currencies didn't really fluctuate but the war meant hostility so gold couldn't be moved between countries.

• Inflation precludes maintaining gold parity 1919 o £ allowed to float, quickly falls to a low of $3.20

• Most other countries come off gold, (not USA), but there is a commitment to restoring the gold standard. Return to gold 1920-25

• Bank of England want to return to full $4.86 asap, EU post-war disruption means process takes longer than expected.

• Sterling's value increased by tight monetary & fiscal policies before the return to Gold 1925, announcement made by Churchill (current chancellor of the exchequer). Other countries follow (Ger 1924, Fr 1926) Why return?

****************************End Of Sample*****************************

Buy the full version of these notes or essay plans and more in our Economic History of Modern Britain Notes.