From Plowshares to Swords: The American Economy in World War II
NBER Historical Working Paper No. 77
This paper examines the U.S. economy in World War II. It argues that the mobilization must be viewed as a rapidly evolving historical process rather than, as is often the case a single undifferentiated event. For example, the employment of unemployed resources, a factor often cited to explain the success of the mobilization, was important during the national defense period, but was relatively unimportant during the period of active U.S. involvement. On the financial side, money creation was more important during the first year of active involvement than in subsequent years. The most significant legacy of the war, viewed in relation to the prosperous era that followed, may have been the change in the macroeconomic regime. The paper also discusses the limitations of the basic time series.