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« Peter Lewin on Uncertainty | Main | Vincent Ostrom --- theorist of polycentric order »


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It is laughable that economists could have bought into the idea of war-time prosperity. What is produced in war is not fit for human consumption. What is fit for human consumption is diverted to troops fighting the war.


That is a nice paper you and Mr. McPhillips wrote. It reminded a lot of my parents, who were raised during the war (both born in '34). It's the kind of experience that stays with you. My parents taught us kids all about canning & preserving, gardening, hemming & patching clothes - the lot! You'll notice, too, people of that era are compulsive hoarders. Not a damn rusty screw is thrown away.

What? No Daniel Kuehn and his usual equivocations? I thought for sure he'd be the first one here.

Chest -
I don't do equivocations. There's not much to disagree about the fact that consumption was suppressed during the Great Depression. Did you expect anyone at all to challenge that?

The contribution to output and employment recovery is obvious and undeniable (DeLong, Summers, Romer, Vernon, and that whole literature has argued about what percentage of the recovery was due to the war spending exactly). The fact that it did not come in the form of improved consumption seems equally obvious and undeniable.

If you want to just decide that it doesn't count if its not private investment and consumption, who can really challenge you on that. It seems like a very odd judgement call to me, but you're welcome to decide you don't care about it. But as far as the facts of the case I think people are reasonably agreed on what's going on.

We've always had the national income figures - what's neat about this paper, of course, is that it provides some cultural context to all that.

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