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Timeline: Key Economic Events That Shaped the Modern Era, 1776–2014

1776 Adam Smith, the founder of modern economics, writes An Inquiry into the Nature and Causes of the Wealth of Nations, an anchor text for the classical school of economic thought.

1791 The United States establishes the First Bank of the United States, a central bank with a 20-year charter.

1798 Thomas Malthus writes An Essay on the Principles of Population as It Affects the Future Improvement of Society, causing some to label economics as the “dismal science”.

1803 Jean Baptiste Say writes his Treatise on Political Economy and popularizes laissezfaire capitalism.

1816 The United States establishes the Second Bank of the United States, the nation's second central bank, with a 20-year charter.

1817 David Ricardo writes Principles of Political Economy, which uses the theory of comparative advantage to defend free trade in global markets.

1832 U.S. president Andrew Jackson vetoes legislation that would have extended the charter of the Second Bank of the United States for another 20 years.

1848 Karl Marx and Friedrich Engels write The Communist Manifesto, a foundation of the Marxist school of economic thought.

1867 Karl Marx writes the first of three volumes of Das Capital, a tome explaining the inevitability of scientific socialism.

1869 Uriah Stephens founds the Knights of Labor, a secret society of workers seeking improvements in the workplace.

1876 Thomas A. Edison creates the world's first private research laboratory, then called an invention factory, in Menlo Park, New Jersey.

1886 Samuel Gompers founds the American Federation of Labor, which soon replaces the Knights of Labor as America's top labor union.

1890 Alfred Marshall writes Principles of Economics, which becomes the world's most widely recognized economics textbook.

Congress passes the Sherman Antitrust Act to opposes the formation of monopolies and other restraints on competitive markets.

1896 Charles H. Dow creates the Dow Jones Industrial Average, an index of stock performance based on price changes of twelve leading stocks.

1899 The National Consumers League is founded as America's first national consumer organization.

1900 The term “economics” replaces “political economy” in common usage.

1903 Mary Harris (Mother) Jones lead the march of the mill children to bring national attention to the plight of child labor in America.

1905 The Industrial Workers of the World is founded under the slogan “One Big Union” to support workers' rights and oppose capitalism in the United States.

1913 The Federal Reserve Act establishes the Federal Reserve System, the first central bank in the United States since the 1830s.

The Ford Motor Company introduces the moving assembly line in the production of automobiles.

The Sixteenth Amendment to the U.S. Constitution establishes a national income tax.

1914 The Clayton Antitrust Act and Federal Trade Commission Act outlaw anticompetitive business practices in U.S. markets.

The first great wave of globalization ends when World War I erupts in Europe.

1917 Vladimir I. Lenin leads a successful communist revolution in Russia.

1919 The International Labor Organization is founded to advocate for labor's rights throughout the world.

1922 The Union of Soviet Socialist Republics is formally established as the world's first communist country.

1928 Joseph Stalin introduces the five-year plan in the Soviet Union and suppresses opposition to the Communist Party's rule in the country.

1929 The stock market crash at the New York Stock Exchange is the unofficial beginning of the Great Depression in the United States.

1933 U.S. president Franklin D. Roosevelt introduces elements of New Deal legislation designed to address the hardships caused by the Great Depression.

The Glass-Steagall Banking Act separates commercial and investment banking, and creates the Federal Deposit Insurance Corporation.

Frances Perkins is appointed secretary of labor, the first woman cabinet appointee in U.S. history.

1935 The Social Security Act is created to provide some income security for the elderly and other distressed groups.

The Wagner Act guarantees workers the right to form unions and bargain collectively with employers.

1936 John M. Keynes writes The General Theory of Employment, Interest, and Money, which launches the Keynesian school of economic thought.

The Consumers Union, which publishes Consumer Reports, is founded in the United States.

1938 The Fair Labor Standards Act creates the first national minimum wage of $0.25 per hour, a maximum work week of 44 hours, and overtime pay.

The Congress of Industrial Organizations is founded as an industrial union and a rival union to the American Federation of Labor.

1941 Simon Kuznets, the father of the gross national product, writes National Income and Its Composition, 19191938.

1942 Joseph A. Schumpeter writes Capitalism, Socialism, and Democracy, stressing the role of innovation and “creative destruction” in the functioning of a capitalist economy.

1944 The Bretton Woods Conference creates the World Bank and the International Monetary Fund.

The fixed exchange rate system is established to support international trade and other global exchanges.

1945 The United Nations is founded at the San Francisco Conference.

A second great age of globalization begins at the close of World War II.

1946 The invention of the electronic numerical integrator and calculator (ENIAC) launches the computer age.

The Employment Act of 1946 expands the U.S. government's role in promoting full employment, maximum output, and price stability.

1947 The General Agreement on Tariffs and Trade is created to support free trade. 1949 Mao Zedong leads a successful communist revolution in China, which leads to the founding of the People's Republic of China.

1955 The American Federation of Labor and the Congress of Industrial Organizations merge to form the AFL-CIO, the nation's largest labor union.

1960 The Organization of Petroleum Exporting Countries, a producer cartel, is founded.

1962 U.S. president John F. Kennedy identifies four basic consumer rights: the right to safety, to be informed, to choose, and to be heard.

1964 The Civil Rights Act of 1964 provides protections against job and wage discrimination based on race, color, religion, gender, or national origin.

U.S. president Lyndon B. Johnson initiates a series of Great Society programs to expand the social safety net for the needy.

1966 Cesar Chavez founds the United Farm Workers, a union representing agricultural and migrant farmworkers.

1967 Tanzanian president Julius Nyerere introduces ujamaa, a type of socialism based on traditional tribal communalism.

1969 ARPANET, the precursor of the Internet, is invented by the U.S. Department of Defense.

1970s Stagflation, the simultaneous occurrence of stagnant growth and inflation, complicates government stabilization policies.

1970 Paul Samuelson is the first American economist to win the Nobel Prize in Economic Science.

1971 Ralph Nader founds Public Citizen and is recognized as the chief spokesperson for the American consumer movement.

1973 The flexible exchange rate system replaces the fixed exchange rate system.

The United States dips into a severe recession.

1976 Mao Zedong dies, which opens discussions about the introduction of marketoriented economic reforms in China.

1977 Fiber optics technology vastly expands communications potential.

1978 Deng Xiaoping adopts a gradualist approach to initiating market-based economic reforms in China.

1980 The United States enters a severe “double-dip” recession, which lingers until 1982.

1981 U.S. president Ronald Reagan supports supply-side economics, often called Reaganomics, during his two terms as president.

1983 Muhammad Yunis founds the Grameen Bank, a microcredit institution in Bangladesh.

1985 Soviet premier Mikhail Gorbachev introduces market-oriented economic reforms under the banner of perestroika, and political reforms under glasnost.

1987 Alan Greenspan is appointed chairman of the Federal Reserve System, a position he holds until 2006.

The Montreal Protocol, a multilateral environmental treaty, targets ozonedepleting substances in the atmosphere.

1989 Tim Berners-Lee invents the World Wide Web.

1990 The United Nations Development Program introduces a Human Development Index to assess the progress countries make in improving people's quality of life. The United States enters a mild recession, after a prolonged period of expansion during the 1980s.

1991 The Union of Soviet Socialist Republics formally dissolves, and the Commonwealth of Independent States is formed from 12 of the former Soviet republics.

1992 The Russian Federation and other transition countries begin an uneasy transition from communism toward capitalism and from totalitarianism toward democracy.

1993 The Maastricht Treaty creates the European Union.

1994 The North American Free Trade Agreement takes effect.

The Common Market of the South, or MERCOSUR, is formed.

The eighth and final GATT trade round concludes at Marrakesh, Morocco, with the creation of the World Trade Organization.

1995 The World Trade Organization formally replaces the General Agreement on Tariffs and Trade.

1996 The Temporary Assistance for Needy Families program replaces the unpopular Aid to Families with Dependent Children as the chief income assistance program for the poor.

1997 Hong Kong is transformed from a British colony to a Special Administrative Region of China.

The East Asian financial crisis destabilizes the global economy, illustrating the danger of financial contagion in the global economy.

The U.S. minimum wage is increased for the twentieth time since 1938, from an hourly wage rate of $4.75 to $5.15.

1998 The United States achieves the first of four federal budget surpluses during the presidency of Bill Clinton.

1999 The World Trade Organization's Millennium Round of trade negotiations flops in Seattle amid massive antiglobalization protests by civil society organizations. The euro begins its phase-in as the European Union's common currency.

Congress repeals portions of the Glass-Steagall Act, an act that had separated commercial banking from riskier investment banking since the 1930s.

2000 The World Bank introduces a new measure of economic well-being, the gross national income (GNI) per capita.

The United Nations announces eight Millennium Development Goals to guide and measure progress toward sustainable economic development.

2001 The United States slips into a mild recession after a prolonged expansion during the 1990s.

Terrorist attacks on New York City and Washington, DC, slow international trade and foreign direct investment.

2002 The euro officially replaces the national currencies of 12 of the 15 EU member nations, thus creating the European Monetary Union (Eurozone).

2003 Officers of several large U.S. corporations, including Enron, are indicted for financial crimes.

The Jobs and Growth Tax Relief Reconciliation Act reduces income tax rates and tax obligations to stimulate economic growth.

2004 A European Union “enlargement” adds 10 countries to the EU.

2005 The United Nations proclaims 2005 as the International Year of Microcredit. 2006 A U.S. and global financial meltdown begins with the collapse of the U.S. real estate market and the uncertain value of derivatives, a widely used financial instrument.

Ben Bernanke is selected as the new chairman of the Federal Reserve System and serves two terms, ending in 2014.

2007 The Dow Jones Industrial Average peaks on October 9 at 14,165.

The U.S. housing bubble bursts, sending shock waves throughout the global economy.

The Great Recession begins in December and lasts until June 2009.

2008 U.S. president George W. Bush offers a tax rebate to stimulate growth in the U.S. economy.

Emergency stimulus spending and the Toxic Assets Relief Program pump more than a trillion dollars into the sputtering U.S. economy; governments in many other countries initiate similar policies to reverse the economic slide into global recession.

2009 The Dow Jones Industrial Average troughs on March 5 at 6,926.

The global recession reduces global output, international trade, and foreign direct investment.

The Great Recession officially ends in June, but unemployment tops 10 percent for a time.

The Federal Reserve System initiates the first phase of quantitative easing by purchasing $1.75 trillion in debt.

The U.S. federal budget deficit swells to more than $1 trillion, and annual budget deficits in excess of $1 trillion continue for four consecutive years.

2010 The Wall Street Reform and Consumer Protection Act is passed by Congress, tightening some restrictions on investment practices and strengthening some protections for the public.

The Federal Reserve System initiates a second phase of quantitative easing to stimulate borrowing and spending.

The Affordable Health Care Act is passed by Congress.

China surpasses Japan as the world's second largest economy behind the United States.

2011 Standard & Poor's downgrades the credit rating of the U.S. government from AAA to AA+ over concerns about spiraling federal deficits and other financial instability.

The U.S. GDP-to-debt ratio surpasses 100, which means that the U.S. national debt is larger than the nation's gross domestic product.

The Occupy Wall Street movement begins as a sign of discontent with the pace of the economic recovery, the growth of inequality, and abuses by the financial system.

The U.S. poverty rate remains at about 15 percent, or 46 million people (an all-time high).

2012 The tepid U.S. recovery continues to show some gains such as slow but positive growth in national output and slow but steady declines in the unemployment rate.

The Federal Reserve System announces a third phase of quantitative easing in September ($40 billion in bond and asset purchases) and soon thereafter an additional $45 billion per month in bond purchases, which increases Fed purchases to $85 billion per month through 2013.

2013 Sluggish or negative economic growth in Europe slows global growth, international trade, and foreign direct investment.

The U.S. federal budget sequester goes into effect in March, which makes automatic spending cuts in national defense and other discretionary programs.

The Dow Jones Industrial Average hits a series of record highs during the summer and fall signaling investor confidence in the U.S. economy.

The unemployment rate continues to fall, reaching 7.4 percent of the labor force during the summer months.

U.S. consumers show some resilience by increasing their purchases of major items such as automobiles and homes, while moderating other types of spending.

The U.S. national debt ($16.9 trillion) tops the gross domestic product ($15.8 trillion) by about $1 trillion.

2014 The U.S. Senate confirms Janet Yellen to a four year term as Fed chair, the first woman to lead the Federal Reserve System.

On the eve of the 2015 target date, several of the United Nations' Millennium Development Goals have been reached, and progress continues on others.

The World Bank's 2014 World Development Report focuses on the need to manage risks inherent in attaining sustainable economic development in the world's poorer regions.

Europe braces for additional financial stresses within the Eurozone with its European Stability Mechanism, which funds financial assistance to troubled member nations.

United Nations observances include dedications of 2014 as the International Year of Small Island Developing States, and the International Year of Family Farming.

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