The Postwar Boom: Europe Rebuilds, America Rises

Europe emerged from the First World War facing economic and demographic devastation without precedent, including the physical destruction of infrastructure, factories, and farmland across the regions of France and Belgium hit hardest by the fighting. The massive war debts of the belligerent powers produced deep financial distortions, and the single most consequential shift proved structural: the United States moved from being a net international debtor before the war to becoming its principal creditor afterward, relocating the center of gravity of the global economy from Europe to North America. Postwar hyperinflation battered several European economies, most severely Germany in 1923, though Austria, Hungary, and Poland suffered serious inflationary crises of their own. Several countries gradually returned to the gold standard during the decade in search of monetary stability: Britain did so in 1925 under Chancellor of the Exchequer Winston Churchill, at a rate that economists including John Maynard Keynes considered damagingly overvalued for British exports, while France stabilized the franc through a significant devaluation around 1926-1928.