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The impact of the Second World War on US productivity growth1

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  • ALEXANDER J. FIELD

Abstract

This paper considers the productivity impact on the US economy of the period of war mobilization and demobilization lasting from 1941 to 1948. Optimists have pointed to learning by doing in military production and spin‐offs from military R & D as the basis for asserting a substantial positive effect of military conflict on potential output. Productivity data for the private non‐farm economy are not consistent with this view, as they show slower total factor productivity (TFP) growth between 1941 and 1948 than before or after. The paper argues for adopting a less rosy perspective on the supply side effects of the war.

Suggested Citation

  • Alexander J. Field, 2008. "The impact of the Second World War on US productivity growth1," Economic History Review, Economic History Society, vol. 61(3), pages 672-694, August.
    • Handle: RePEc:bla:ehsrev:v:61:y:2008:i:3:p:672-694
    DOI: 10.1111/j.1468-0289.2007.00404.x
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    1. Higgs, Robert, 1992. "Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s," The Journal of Economic History, Cambridge University Press, vol. 52(1), pages 41-60, March.
    2. Goldin, Claudia D. & Lewis, Frank D., 1975. "The Economic Cost of the American Civil War: Estimates and Implications," The Journal of Economic History, Cambridge University Press, vol. 35(2), pages 299-326, June.
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    4. Margo, Robert A., 1991. "The Microeconomics of Depression Unemployment," The Journal of Economic History, Cambridge University Press, vol. 51(2), pages 333-341, June.
    5. Alexander J. Field, 2007. "The origins of US total factor productivity growth in the golden age," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 1(1), pages 63-90, April.
    6. Jules Backman & M. R. Gainsbrugh, 1949. "Productivity: Productivity and Living Standards," ILR Review, Cornell University, ILR School, vol. 2(2), pages 163-194, January.
    7. Ruttan, Vernon W., 2006. "Is War Necessary for Economic Growth?: Military Procurement and Technology Development," OUP Catalogue, Oxford University Press, number 9780195188042.
    8. Field, Alexander J., 2006. "Technological Change and U.S. Productivity Growth in the Interwar Years," The Journal of Economic History, Cambridge University Press, vol. 66(1), pages 203-236, March.
    9. Alexander J. Field, 2003. "The Most Technologically Progressive Decade of the Century," American Economic Review, American Economic Association, vol. 93(4), pages 1399-1413, September.
    10. Field, Alexander J., 2007. "The equipment hypothesis and US economic growth," Explorations in Economic History, Elsevier, vol. 44(1), pages 43-58, January.
    11. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-1085, December.
    12. Higgs, Robert, 1999. "From Central planning to the Market: The American Transition, 1945–1947," The Journal of Economic History, Cambridge University Press, vol. 59(3), pages 600-623, September.
    13. Gordon, Robert J, 1969. "$45 Billion of U.S. Private Investment Has Been Mislaid," American Economic Review, American Economic Association, vol. 59(3), pages 221-238, June.
    14. Higgs, Robert, 2004. "Wartime Socialization of Investment: A Reassessment of U.S. Capital Formation in the 1940s," The Journal of Economic History, Cambridge University Press, vol. 64(2), pages 500-520, June.
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    Cited by:

    1. repec:dgr:rugggd:gd-108 is not listed on IDEAS
    2. Hugh Rockoff, 2016. "The U.S. Economy in WWII as a Model for Coping with Climate Change," Departmental Working Papers 201609, Rutgers University, Department of Economics.
    3. Ethan Ilzetzki, 2023. "Learning by necessity: Government demand, capacity constraints, and productivity growth," Discussion Papers 2305, Centre for Macroeconomics (CFM).
    4. Daniel P. Gross & Bhaven N. Sampat, 2023. "America, Jump-Started: World War II R&D and the Takeoff of the US Innovation System," American Economic Review, American Economic Association, vol. 113(12), pages 3323-3356, December.
    5. Herman De Jong & Pieter Woltjer, 2011. "Depression dynamics: a new estimate of the Anglo‐American manufacturing productivity gap in the interwar period," Economic History Review, Economic History Society, vol. 64(2), pages 472-492, May.
    6. Price Fishback & Joseph A. Cullen, 2013. "Second World War spending and local economic activity in US counties, 1939–58," Economic History Review, Economic History Society, vol. 66(4), pages 975-992, November.
    7. Jong, H. de & Woltjer, P., 2009. "A Comparison of Real Output and Productivity for British and American Manufacturing in 1935," GGDC Research Memorandum GD-108, Groningen Growth and Development Centre, University of Groningen.
    8. Coccia, Mario, 2018. "A Theory of the General Causes of Long Waves: War, General Purpose Technologies, and Economic Change," Technological Forecasting and Social Change, Elsevier, vol. 128(C), pages 287-295.
    9. Dieppe,Alistair Matthew & Kilic Celik,Sinem & Okou,Cedric Iltis Finafa, 2020. "Implications of Major Adverse Events on Productivity," Policy Research Working Paper Series 9411, The World Bank.
    10. Alexander J. Field, 2011. "The Adversity/Hysteresis Effect: Depression-Era Productivity Growth in the U.S. Railroad Sector," NBER Chapters, in: The Rate and Direction of Inventive Activity Revisited, pages 579-606, National Bureau of Economic Research, Inc.
    11. Coccia, Mario, 2015. "General sources of general purpose technologies in complex societies: Theory of global leadership-driven innovation, warfare and human development," Technology in Society, Elsevier, vol. 42(C), pages 199-226.
    12. Alexander J. Field, 2023. "The decline of US manufacturing productivity between 1941 and 1948," Economic History Review, Economic History Society, vol. 76(4), pages 1163-1190, November.
    13. Cristiano Andrea Ristuccia & Adam Tooze, 2013. "Machine tools and mass production in the armaments boom: Germany and the United States, 1929–44," Economic History Review, Economic History Society, vol. 66(4), pages 953-974, November.
    14. Taylor Jaworski & Andrew Smyth, 2018. "Shakeout in the early commercial airframe industry," Economic History Review, Economic History Society, vol. 71(2), pages 617-638, May.

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