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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  

Steven Horwitz

Ball State University

Michael J. McPhillips

affiliation not provided to SSRN

Date Written: June 20, 2012

Abstract

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

Horwitz, Steven and McPhillips, Michael J., The Reality of the Wartime Economy: More Historical Evidence on Whether World War Il Ended the Great Depression (June 20, 2012). Independent Review, 2013 Forthcoming. Available at SSRN: https://ssrn.com/abstract=2095699

Steven Horwitz (Contact Author)

Ball State University ( email )

Department of Economics
Ball State University
Muncie, IN 47306
United States
765 285 5384 (Phone)

Michael McPhillips

affiliation not provided to SSRN ( email )

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