The Civil War devastated the economy of the South. The war, which was largely fought within Southern borders, led to destroyed infrastructure and crops as well as the destruction of many major southern cities, including Atlanta. The blockade and the strain of the war effort led to runaway inflation in the South, which also was unable to profit from cotton production. Southern industry, which already lagged far behind the North, was crippled.
In the North, government contracts led to industrial expansion. The construction of western railroads continued apace, and thousands of immigrants flooded into Northern cities to fill manufacturing jobs. In short, the economy boomed for most of the war. The war did lead to serious inflation in the North, and there were a series of financial panics in the wake of the war. Overall, however, the North did not suffer the extreme deprivation and economic disaster that the South did.