These Historical Events Changed the Global Economy Forever

Year Occurred: 1917
Dow Jones Industrial Average: 96.15*
Price Per Gallon of Gas: $0.28*

World War I was the biggest international war thus far. The war began in the early twentieth century, and it produced a major economic shift. The United States had been going through a recession before WWI occurred, and WWI propelled America into a forty-four-month economic boom.

The United States Enters WWI ©Everett Collection / Shutterstock.com

U.S. spending increased before it was preparing to enter the war itself, and war spending cost 52% of the GDP ($32 billion at the time). When the U.S. entered the war, the course of WWI changed. Over four million Americans served in WWI, and there were 116,708 American casualties.  

Year Occurred: 1991
Dow Jones Industrial Average: 2,929.04*
Price Per Gallon of Gas: $1.14*

The fall of the Berlin Wall took place in November 1991. Depending on who you ask, the fall of the Berlin Wall was either great for the economy or terrible.  Citizens of the GDR were finally permitted to cross over to other countries’ borders.

The Fall of the Berlin Wall @BankableInsight / Twitter.com

After the reunification of Germany, it took awhile for Germany to get back on its feet. East Germany only contributed eight percent of the country’s GDP, and America had to increase foreign aid money to help the country. Though the West German economy had flourished because thousands of U.S. soldiers were stationed there, spending U.S. dollars, it took awhile for reunification to smooth over.

Year Occurred: 2001
Dow Jones Industrial Average: 10,199.29*
Price Per Gallon of Gas: $1.46*

The September 11, 2001 terrorist attacks that took place in New York City caused a global shockwave. The thousands of deaths stunned the world, and the event remains one of the most traumatic events in the history of America.

The 9/11 Attacks ©Anthony Correia/Shutterstock.com

The attacks caused the global stock market to sharply drop. The attacks also cost $40 billion in insurance losses, as a huge chunk of Manhattan was obliterated. It was one of the largest insurance events of all time. Americans were afraid to fly for a long time after, and driving caused an increase of 1,595 auto deaths in 2002. The TSA was created to help boost security.

Year Occurred: 2008
Dow Jones Industrial Average: 11,244.06*
Price Per Gallon of Gas: $3.27*

The Great Recession of 2008 was the second-worst financial crisis in the history of the United States. The Great Recession was a world-wide economic downturn that devastated financial markets, the banking industries, and real estate. The crisis led to a vast increase in mortgage foreclosures, and millions of people lost their jobs, homes, and/or life savings.

The Great Recession @JavyRealty / Twitter.com

In 2008, small businesses were among the worst-hit. 43,500 businesses filed for bankruptcy. The economy didn’t fully recover until 2011, and some economists even went so far as to label the Recession the “Second Great Depression.” 

Year Occurred: 1965
Dow Jones Industrial Average: 969.26*
Price Per Gallon of Gas: $0.30*

Bye, bye Camelot. While WWI helped the US climb out of a recession in the early twentieth century, the Vietnam War was somewhat the opposite. The Vietnam War effort strained America’s production capacities. Factories that would normally have been producing consumer products were instead requisitioned to make military goods.

The Vietnam War ©kut.org

This led to shortages. The funds all went to overseas causes, which led to economic imbalance and a weakened dollar. The weakened dollar caused a global economic downturn, eroded consumer confidence, caused interest rates to skyrocket, and limited the amount of capital that businesses and consumers could access. It was a big reason for the economic crises in the eighties.  

Year Occurred: 2000
Dow Jones Industrial Average: 10,729.38*
Price Per Gallon of Gas: $1.51* 

The Internet is commonplace now, but it was utterly revolutionary in the nineties. The Dot-Com Bubble Burst was caused by excessive speculation on Internet-related companies during the late nineties. This period occurred concurrently with massive growth in the use of the World Wide Web.

When the Dot-Com Bubble burst, many dot-com companies had to file for bankruptcy. These crashes were caused by a lack of capital, leading to many dot-com businesses liquidations. This had a rippling effect on supporting industries (shipping, advertising, etc.), which were forced to scale back. Though 48% of dot-com companies survived the Bubble Burst, they often had lower valuations after 2004.

The Dot-Com Bubble Burst ©boonchoke / Shutterstock.com

Year Occurred: 1929
Dow Jones Industrial Average: 381.17*
Price Per Gallon of Gas: $0.21*

The Great Depression remains the single worst economic event in the history of the world. The Great Depression was, in part, caused by the crash of the stock market in 1929. The U.S. economy had expanded rapidly during WWI, but that came crashing to a halt. The Dust Bowl, a period of intense dust storms in the middle of America, destroyed crops and worsened the human suffering that came with The Great Depression.

The Great Depression ©Visual Studies Workshop/Getty Images

World output and global standards of living dropped immediately. One-fourth of the world population in industrialized countries was unemployed, and those that were employed saw their wages cut. GDP declined by 30%, while industrial production sank by 47%.

Year Occurred: 1941
Dow Jones Industrial Average: 130.57*
Price Per Gallon of Gas: $0.19*

Pearl Harbor came on the heels of the Great Depression. The attack caused thousands of deaths, but it had one silver lining: it pulled America out of the Great Depression. The attack launched America’s involvement in WWII. Jobs were created as people flooded factories to make supplies for the War.

The Attack on Pearl Harbor ©Everett Collection / Shutterstock.com

The surge in employment and spending stimulate the economy. The surge in female employment was also a big reason the economy did well. Men were drafted to fight, while women stayed in America and built tanks, ships, guns, and other supplies. Pearl Harbor acted as a jump-start to the stagnant global economy.

Year Occurred: 1903
Dow Jones Industrial Average: 64.60*
Price Per Gallon of Gas: $0.56*

One of the biggest puzzles in history is how America managed to invent the plane and then lose the airplane market to overseas companies. The Wright Brothers launched their first successful flight in 1903. Though the flight lasted just forty-five seconds, it showed that aviation was possible.

The Wright Brothers Take Flight ©Bettmann / Contributor / gettyimages.com

The impact of aviation on the global economy cannot be understated. The commercial and military potential that aviation brought, as well as the freedom of travel that came from it (no more long road trips) stimulated the economy in the early twentieth century. Though WWI had a bigger beneficial economic impact during that time, the Wright Brothers’ invention was also very impactful.

Year Occurred: 1918
Dow Jones Industrial Average: 82.20*
Price Per Gallon of Gas: $0.25*

The Spanish Flu actually didn’t devastate the economy as much as the current-day Coronavirus has done. Though the outbreak shook the global economy, it didn’t leave lasting effects. The Spanish Flu infected 500 million people, killing 50 million (675,000 of whom were Americans).

The Spanish Influenza Pandemic ©The Spanish Influenza Pandemic / Shutterstock.com

The Spanish Flu led to global declines in GDP by 6%. Though this sounds bad, this shock-wave was temporary and did not permanently leave a mark on the aggregate American economy. The reason for the temporary nature of this impact is that the Spanish Flu hit during a stock market downturn. The Dow index managed to absorb the Flu’s shock and bounce back. GDP grew 1% in 1919.

Year Occurred: 1991
Dow Jones Industrial Average: 2,929.04*
Price Per Gallon of Gas: $1.14*

The introduction of the Internet changed everything. While it seems commonplace now (we all shop online), it was predicted to be a massive economic stimulant back in the nineties and 2000s. The Dot-Com Bubble Burst was a negative side of the invention of the Internet, but the Internet also had its positives.

The Introduction of the Internet @IBM / Twitter.com

The Internet led to faster productivity growth, as well as faster living standard growth. The Internet also produced cost savings in the technological and manufacturing sectors. The Internet led to lower prices for consumers, and the concept of shopping became, in many ways, digital. You could order at the click of a button, which led to spending increases.

Year Occurred: 1963
Dow Jones Industrial Average: 646.79*
Price Per Gallon of Gas: $0.31*

One of the most heartbreaking events of the twentieth century was the assassination of president John F. Kennedy. The JFK Assassination had a short, yet steep, impact on the economy. The stock market took a dive. It sank Standard & Poor’s by 2.8%. The stock market closed down early, with Wall Street shuttering its doors at 2:07PM in order to cope with the loss.

The JFK Assassination ©Bettmann / Contributor / gettyimages.com

One economic expert described the assassination as a “chaos” and the cause of “total uncertainty.” The assassination’s impact on the stock market recovered. Two days after JFK was killed, the stock market regained all of its losses. 

Year Occurred: 1987
Dow Jones Industrial Average: 2,277.53*
Price Per Gallon of Gas: $0.90*

The Stock Market Crash of 1987 was less severe than the Great Recession or the Great Depression, but it was still pretty bad. Out of the world’s twenty-three industrialized countries, nineteen had economic declines of greater than 20%. The worldwide losses were around $1.7 trillion.

Stock Market Crash @USATODAY / Twitter.com

People were terrified that the economic instability would last decades, even leading to a Second Great Depression. In terms of the stock market collapse, Black Monday (the name for the day of the crash), comprised the largest one-day percentage loss in the history of the stock market. The DOW dropped 22.6%. Because the US’s central banks provided market liquidity, this effect was temporary and limited in scope.

Year Occurred: 1950
Dow Jones Industrial Average: 216.28*
Price Per Gallon of Gas: $0.27*

Before the Diners Club issued its first credit card in 1950, credit was considered a product only for the very wealthy to use at a few places. The introduction of the credit card suddenly allowed millions of everyday people to make purchases and earn rewards.

The Diners Club Issues First Credit Card @Evan Sharp / Pinterest.com

As you can imagine, spending increased, and not just domestically. The spending boom of the fifties led to the rise of consumerism. The increase in consumer spending allowed Americans to have a standard of living in the fifties that no other country could even come close to. This was a major change for ‘50s adults, many of whom had grown up during the Great Depression.