The Myth of Wartime Prosperity: Canadian Evidence

32 Pages Posted: 6 Dec 2022 Last revised: 2 Feb 2023

See all articles by Vincent Geloso

Vincent Geloso

George Mason University - Department of Economics

Casey Pender

Mount Allison University

Date Written: November 2, 2022

Abstract

This paper provides a series of nominal non-war output for Canada during WWI and WWII and a novel estimated price deflator to account for wartime price controls. We argue that our nominal series, deflated by our price estimates, provides a superior indicator of welfare and general economic well-being during wartime than more traditional measures of real output. When looking at our series, we find that it is 11% lower than traditional measures in 1918 and closer to 30% lower in 1945. We also corroborate our finding with domestic private investment in Canada, which we show follows similar trends of decline during wartime relative to trend. We argue that this provides evidence against the idea of wartime prosperity and, more specifically, against the notion of WWII ending the Great Depression in Canada.

Keywords: Wartime Prosperity, Great Depression, Canada, Economic Growth

JEL Classification: E01, E32, O11

Suggested Citation

Geloso, Vincent and Pender, Casey, The Myth of Wartime Prosperity: Canadian Evidence (November 2, 2022). GMU Working Paper in Economics No. 23-08, Available at SSRN: https://ssrn.com/abstract=4265177 or http://dx.doi.org/10.2139/ssrn.4265177

Vincent Geloso (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

Casey Pender

Mount Allison University ( email )

Sackville, New Brunswick EOA 3CO
United States

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