After the War Boom: Reconversion on the U.S. Pacific Coast, 1943-49

49 Pages Posted: 23 Jul 2003

See all articles by Paul W. Rhode

Paul W. Rhode

University of Michigan at Ann Arbor; National Bureau of Economic Research (NBER)

Date Written: July 2003

Abstract

During the Second World War, the American Pacific Coast experienced a tremendous economic boom fueled by disproportionately large flows of military spending. Even before the conflict's end, fears spread that the region's postwar economy would not provide sufficient jobs for its greatly enlarged labor force. Responsible authorities predicted one million workers one-quarter of the labor force would be unemployed one year after demobilization. But the conversion experience over the 1945-49 period proved far easily than anticipated, a finding which this paper attributes to strong home market effects' highlighted in the new Economic Geography literature. Based on an empirical investigation of the long-run relationship between manufacturing production and the size of the Pacific region's market, this study finds support for the views that the region's economic structure could support multiple equilibria and that the transitory shock of military spending during World War II helped push the Pacific Coast economy from a low-level' equilibrium to a higher-level' equilibrium consistent with the same fundamentals.

Suggested Citation

Rhode, Paul W., After the War Boom: Reconversion on the U.S. Pacific Coast, 1943-49 (July 2003). NBER Working Paper No. w9854, Available at SSRN: https://ssrn.com/abstract=425590

Paul W. Rhode (Contact Author)

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