Hungary Economic System 1918-1945

Hungary's economic system between 1918 and 1945 was characterized by significant changes
and challenges due to a series of political and economic upheavals during this period.
After World War I, Hungary became an independent country, and the newly formed
government introduced a mixed economy, which combined elements of both capitalism and
socialism. The government established various social policies to address the severe economic
issues caused by the war, such as unemployment, poverty, and inflation.
In the 1920s, Hungary's economy improved under the leadership of Prime Minister István
Bethlen, who implemented various economic policies aimed at stabilizing the currency and
increasing foreign investment. He also encouraged industrialization and the development of
agriculture.
However, the Great Depression had a severe impact on the Hungarian economy in the 1930s,
leading to increased unemployment, poverty, and political instability. The government
responded by adopting protectionist policies, such as import restrictions, to stimulate the
domestic economy.

In 1938, Hungary joined the Axis Powers, and during World War II, the country's economy
was primarily focused on supporting the German war effort. Hungary's industrial production
was directed towards producing arms and supplies for the German army, and the country also
provided a significant number of troops for the war.

Following the war, Hungary's economy was in shambles, and the country experienced
significant political turmoil. The Communist Party took control of the government in 1947,
and the economy was reorganized under a planned socialist system, with the nationalization
of major industries and collectivization of agriculture.

Overall, Hungary's economic system between 1918 and 1945 experienced significant changes
due to political upheavals, external pressures, and economic crises. The country moved from
a mixed economy to protectionism, war-time economy, and eventually to a planned socialist
system.