Gross National Product 1920-1932

Anjali Chamdra, Saige Holst, Luis Arredondo, Sravya Boppuri

Given the GNP figures from 1920 to 1929, how would you characterize the health of the economy during the 1920’s?

The GNP was at its lowest, during the time period, in 1921 and 1922 at $74 billion. The highest during this time period was $104 billion in 1929. In the middle of the time period, around 1926, the figures stood at $97 billion. Overall from the 1920 to 1929 the figures varied from $74 billion to $104 billion. Therefore, the economy was pretty healthy at the time, especially in 1929.

What happened to business production from 1929 to 1932?

During the roaring 20s, production and wealth increased, but because of stock market investors who took a speculative approach to the stock market caused the Stock Market Crash of 1929. Because of this, over 5000 banks went out of business along with 13 million people who were unemployed and caused industrial production to fall by nearly 45% during 1929-1932.

Did business failures generally increase or decrease from 1920 to 1932?

They generally increased. Ultimately in 1932, the biggest decrease was evident with $58 billion dollars as the figure value.

Additional Information

  • GNP and GDP are similar but different. GDP defines production based on the location (the U.S. GDP only counts production done in the U.S.), whereas the GNP bases it on ownership (the U.S.’s GNP includes overseas American-owned production).

  • The GNP is calculated to see how the nationals of a country are doing economically.

  • The GNP fell drastically, from around 105 billion dollars overall in 1929 to around 55 billion by 1933.

  • The failures of business and large unemployment rate helped to decrease the country’s GNP.

  • privately produced goods and service are not part of the official GNP

  • GNP is calculated based on the total market value of goods and service produced plus the citizen’s income over a period of time

  • measures output based output produced by a country’s companies

  • GDP is Gross Domestic Product: first introduced during the great depression in the 1930s to determine the country’s economic welfare

  • Simon Kuznet created a formula to determine the gdp. This original formula included all the economic production in the country