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The Prewar Business Cycle Reconsidered: New Estimates of Gross NationalProduct, 1869-1918

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  • Christina D. Romer

Abstract

This paper shows that the existing estimates of prewar gross national product exaggerate the size of cyclical fluctuations. The source of the exaggeration is that the original Kuznets estimates are based on the assumption that GNP moves one-for-one with commodity output valued at producer prices. New estimates of GNP for 1869-1918 are derived using the estimated aggregate relationship between GNP and commodity output for the interwar and postwar eras. The new estimates of GNP indicate that the business cycle is only slightly more severe in the pre-Worid War I era than in the post-World War II era.

Suggested Citation

  • Christina D. Romer, 1986. "The Prewar Business Cycle Reconsidered: New Estimates of Gross NationalProduct, 1869-1918," NBER Working Papers 1969, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:1969
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    1. J. Bradford DeLong & Lawrence H. Summers, 1986. "The Changing Cyclical Variability of Economic Activity in the United States," NBER Chapters, in: The American Business Cycle: Continuity and Change, pages 679-734, National Bureau of Economic Research, Inc.
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    6. Simon Kuznets & Elizabeth Jenks, 1961. "Appendices and Index, "Capital in the American Economy: Its Formation and Financing"," NBER Chapters, in: Capital in the American Economy: Its Formation and Financing, pages 465-664, National Bureau of Economic Research, Inc.
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    8. Milton Friedman, 1962. "The Interpolation of Time Series by Related Series," NBER Books, National Bureau of Economic Research, Inc, number frie62-1, October.
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