the 1950's
...rica waited expectantly for the United States to suffer a postwar economic collapse. The recession came in the third quarter of 1948 and lasted until the second quarter of 1950.” (Vatter, 121) Immediately following this recession came an unexpectedly large amount of inflation. Slow economic growth and slow increases in the money supply are considered the most probable culprits. At this time the money supply rose much more slowly than the Gross National Product. When the Gross National Product rose significantly from 1955-1960 it was accompanied by an increase in the velocity of money, however, the quantity of money did now keep in step with these changes. This led to a significant ratio change between the Gross National Product and the money supply. The increase in velocity of money due to this discrepancy is the most important component of the inflationary trends during this decade. Gross National Product rose from $211 billion in 1944 to $329 billion in 1951, but measured in 1960 dollars of equal purchasing power, the rise was only from $373 billion in 1944 to $391 billion in 1951. Furthermore, the Gross National Product growth rate (in constant dollars) was slower than many other industrialized areas, such as Japan and Taiwan. (Vatter, 124) Money quickly lost large portions of its value, which at first was not noticed because many citizens just felt as if they had more money, but in reality they were very wrong. The money they had could only buy small portions of what it previously could. During this time the price of consumer goods increased dramatically because of the inflation. The price hike was due to lapses following the removal of price controls following WW II, and large increases in consumer demand and credit. Another factor could have been the huge swell in indirect business taxes and social security taxes. Over the decade the housing supply increased 27 percent and the overall quality level of aggregate US housing increased dramatically. A move from urban areas to suburbs was the predominate characteristic of the new construction and increasing health and living conditions quality characterized the urban growth. (Barach, 57) The “baby boomers” were the catalyst for the exodus to the suburbs. Each year, one out of every five families packed up and left for somewhere else. (Chalmers, 5) Many families moved to the suburbs because the homes provided more space and better living conditions for these larger families. These moves were necessity considering that during the fifties the population increased by over twenty-eight million. ...