The Reality of the Wartime Economy: More Historical Evidence on Whether World War Il Ended the Great Depression
Independent Review, 2013 Forthcoming
32 Pages Posted: 28 Jun 2012
Date Written: June 20, 2012
In response to contemporary arguments that the expenditures associated with World War II were a major factor in ending the Great Depression and should therefore be imitated today, we offer historical evidence to suggest that the wartime economy was hardly a model of success in the eyes of most Americans. Expanding on Robert Higgs’ criticisms of the ability of conventional macroeconomic data to tell the real story, we examine newspapers, diaries, and other primary source material to reveal the retrogression in living standards in the US during the war. Our investigation suggests that wartime prosperity is largely a myth and hardly a model for recovery from the Great Recession.
Keywords: Great Depression, World War II, stimulus, macroeconomic policy
JEL Classification: N12, N42, E01
Suggested Citation: Suggested Citation