From Colonies to Superpower: America's Economic Odyssey.

COLONIAL ECONOMY:-

The colonial economy was characterized by an abundance of land and natural resources an a severe scarcity of labour. This was the opposite of europe and attracted immigrants despite the High death rate caused by New World diseases from 1700 to 1774, the output of the thirteen colonies increased 12-fold giving the colonies an economy about 30% the size of Britain's at the time of independence.

European nations clearly understood that the expanding population, growing economy & increasing trade with north America made it territory worth contesting as they sought to expand profits from their overseas colonies

Colonial population expanded rapidly after 1700, through increased immigration and natural growth likewise,both export and import boomed. Trade was greatest with Europe note that figures for Africa, the Carribean, and other parts of America include the growing slave trade.

Data taken from "The Economy of British America,1607-1789" John J McCusker & Russell R. Menard(1991)

 Time Line 1754-1781,

The eruption of the Seven Years War along the American Frontier in 1763 began a series of steps that led to the American Revolution and ultimately the Siege of Yorktown, the last major battle in North America. Events around the world were closely linked to those in the United States.

A complete History of the American War is nearly the History of Mankind for the whole Epoch of it. The History of France Spain Holland, England and the Neutral Powers, as well as America are at least comprized in it."

-John Adams, 1783

 NOW LETS COMPARE THIS WITH CURRENT ECONOMY (INDEPENDENT ECONOMY)

 The colonial victory in the Revolutionary War left the American economy with a mixed bag of benefits and disadvantages. Previous restrictions on trade and industry ended. As a result, an American merchant marine and manufacturing industry developed, especially in munitions and consumer products. The removal of restrictions on Western expansion caused European-American migration across the Appalachians. Although this made life difficult for the unfortunate Native Americans whose lands were further invaded, it provided economic opportunities for the European-Americans and immigrants who entered the country after the war.

Not all the results of the war made a positive impact on the economy of the United States. American merchants were excluded from the British West Indies, and lost their favored position with Britain as a trade partner. In addition, as wartime demand declined, agricultural prices fell and cities faced high unemployment rates. American merchants maintained trade with Mediterranean countries, and opened trade with China in the 1780s. Mediterranean trade, however, was hampered by pirate attacks; and American ships no longer had the protection of the British Navy. Chinese trade, initially lucrative, became less so in the early nineteenth century: prices in the United States fell; the Chinese market became saturated with American goods; and supplies of furs and sandalwood, the primary commodities being traded, ran low.

The greatest adverse economic legacy of the war, however, was currency and debt. Continental currency had an enormous inflation rate and had depreciated dramatically. To make matters worse, the national government owed approximately $12 million in foreign debt and $44 million in domestic debt; and state governments owed approximately $25 million, mostly in war debts. The primary concerns of post-war economic planners were reducing the inflation rate and raising the value of the currency; and repaying and financing government war debts.

               (Current-Account Balance)

The U.S. current-account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, widened by $3.1 billion, or 1.5 percent, to $219.3 billion in the first quarter of 2023, according to statistics released today by the U.S. Bureau of Economic Analysis (BEA). The revised fourth-quarter deficit was $216.2 billion.

 The first-quarter deficit was 3.3 percent of current-dollar gross domestic product, up less than 0.1 percent from the fourth quarter.

 The $3.1 billion widening of the current-account deficit in the first quarter primarily reflected an expanded deficit on secondary income and a reduced surplus on primary income that were partly offset by a reduced deficit on goods.

Current-Account Transactions (tables 1-5)

Exports of goods and services to, and income received from, foreign residents increased $16.0 billion to $1.15 trillion in the first quarter. Imports of goods and services from, and income paid to, foreign residents increased $19.1 billion to $1.37 trillion.1

Current-Account Transaction

 Trade in goods (table 2)

Exports of goods increased $8.9 billion to $526.6 billion, reflecting increases in consumer goods, mostly medicinal, dental, and pharmaceutical products, and in other general merchandise, mostly goods transferred through the Presidential Drawdown Authority.2 Partly offsetting was a decrease in industrial supplies and materials, mostly natural gas and petroleum and products. Imports of goods decreased $2.1 billion to $789.7 billion, reflecting a decrease in industrial supplies and materials, mainly petroleum and products and chemicals, that was partly offset by an increase in automotive vehicles, parts, and engines, mainly passenger cars and trucks, buses, and special purpose vehicles.

 Trade in services (table 3)

 Exports of services increased $3.5 billion to $244.3 billion, and imports of services increased $2.0 billion to $182.2 billion. The increases in both exports and imports primarily reflected an increase in travel, mostly other personal travel.

 Primary income (table 4)

 Receipts of primary income increased $12.1 billion to $338.6 billion, and payments of primary income increased $18.9 billion to $307.3 billion. The increases in both receipts and payments primarily reflected increases in other investment income, mostly interest on loans and deposits. These increases were mainly due to higher short-term interest rates amid tightening of U.S. and foreign monetary policy.

 Secondary income (table 5)

 Receipts of secondary income decreased $8.5 billion to $44.5 billion, reflecting a decrease in general government transfers, mainly fines and penalties. Payments of secondary income increased $0.4 billion to $94.1 billion, reflecting an increase in private transfers, mainly insurance-related transfers.

Therefore from the above difference,we have completely seen that there were lots of ups and downs in Colonial America and after the independence in the American history but America has knocked the top most position in terms of the country's economy. As we know that only American US Dollar $ is the major source of currency for the foreign bank investments. And US Dollars are only way for the international trade over the world. At the end ,we can definitely say that America has the successful Economic status in the world.

Covered By:- Tanaya Pingle-SYBA

                                

                                    

 Refrences:-

Americanhistory.si.edu/american-revolution/colonial-economy

historycentral.com

https://ww.bea.gov