Question

The period post the Second World War to the mid 1970s saw the US and Europe, enjoy their highest GDP growth rates, before or since. What were the major ‘pillars’ responsible for this achievement?

Answer 1

The first pillar was the increase in aggregate demand that was first stimulated by the government spending to resurrect the infrastructure and facilities and then it was the consumer demand due to new jobs and higher purchasing power. It started a chain of positive economic events and economic growth accelerated. The second pillar is the many technologies and innovations now used for the production and operations that were only available for the military work till the WWII. It increased the productivity level and GDP growth increased in the USA and Europe. The third pillar is the presence of cold war scenarios between USA and Europe and former USSR. It made the governments to continue the spending on military establishments and economy expanded. The next pillar is the exploration of international trade with Asian nations, South American nations and other countries to cater their demand. It creates new opportunities for the growth.

So, above are some of the pillars, accelerating the economic growth.