NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

Christina D. Romer

NBER Working Paper No. 1969
Issued in July 1986
NBER Program(s):   EFG

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.

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Published: Romer, C. "The Prewar Business Cycle Reconsidered: New Estimates of Gross National Product, 1869-1908," from Journal of Political Economy, February 1989, vol. 97, pp. 1-37.

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