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- Title
Is the Stabilization of the Postwar Economy a Figment of the Data?
- Authors
Romer, Christina D.
- Abstract
The article discusses whether the stabilization of the postwar economy is a figment of economic data. It states that one of the most recurrent empirical generalizations about the U.S. economy is that the pre-war economy was substantially more volatile than the post-war economy. It is widely accepted that the business cycle before World War II or before World War I for that matter, was decidedly more severe than the cycle after 1947. The source of this belief is simply every conventional indicator of macroeconomic performance, industrial production, unemployment and Gross National Product all show larger cyclical fluctuations in the late 1800's and early 1900's than after World War II. The article challenges part of the stylized fact that the pre-war economy was substantially more volatile than the post-war economy. It provides an examination of the conventional industrial production series for the pre-World War I and post-World War II periods and shows that the apparent stabilization of this series is actually a figment of the data.
- Subjects
UNITED States; ECONOMIC history; UNITED States economy; WORLD War I; WORLD War II; ECONOMIC stabilization; INDUSTRIES; BUSINESS cycles; GROSS national product; MACROECONOMICS; HISTORY
- Publication
American Economic Review, 1986, Vol 76, Issue 3, p314
- ISSN
0002-8282
- Publication type
Article