1.THE AMERICAN ECONOMY FROM THE FIRST STEPS TO OUR DAYS.

The American economy had to be built from the ground up. Those immigrants who were not willing to work hard seldom did well in the New World. In the beginning there were simply no farms or houses or factories. Whatever was needed had to be made by settlers themselves. Or it had to be imported at great expense. There were a few skilled craftsmen and no established class of agricultural workers, or peasantry. Therefore, if a new way to do the work couldn’t be found, it just didn’t get done.

COLONIAL ERA

The economic history of the United States has its roots in European settlements in the 16th, 17th, and 18th centuries. The American colonies went from marginally successful colonial economies to a small, independent farming economy, which in 1776 became the United States of America. In 180 years, the US grew to a huge, integrated, industrialized economy that made up around one fifth of the world economy. As a result, the US GDP per capita converged on and eventually surpassed that of the U.K., as well as other nations that it previously trailed economically. The economy maintained high wages, attracting immigrants by the millions from all over the world.

1800S

In the 19th century, recessions frequently coincided with financial crises. The Panic of 1837 was followed by a five-year depression, with the failure of banks and then-record-high unemployment levels. Because of the great changes in the economy over the centuries, it is difficult to compare the severity of modern recessions to early recessions. Recessions after World War II appear to have been less severe than earlier recessions, but the reasons for this are unclear.

1900S

The United States has been the world's largest national economy since at least the 1920s. For many years following the Great Depression of the 1930s, when danger of recession appeared most serious, the government strengthened the economy by spending heavily itself or cutting taxes so that consumers would spend more, and by fostering rapid growth in the money supply, which also encouraged more spending. Ideas about the best tools for stabilizing the economy changed substantially between the 1930s and the 1980s.

What was achieved in the first hundred years is amazing. By 1890 e.g. the USA is producing more iron and steel than GB and Germany combined. By 1900, according to several criteria, the USA had become the greatest industrial nation, and its citizens had the highest standard of living in the world.

Today the American economy no longer dominates the world as it did then. But even today, with only 5 % of world’s population and about 6 % of its land area, the USA still produces around 25% of the world’s industrial products, agricultural goods and services.

Despite its fears, that it is no longer at the top in almost every area, America remains the world leader in a great many things. Among these are e.g. biochemical and genetic engineering, space research and development, communications, computer and information services, and similar high-technology fields.

Watch the video http://finance.yahoo.com/blogs/daily-ticker/don-t-believe-these-five-myths-about-the-american-economy--joel-kurtzman-181728603.html

What the most common myth about American economy?