Did War Mobilization Cause Aggregate and Regional Growth?

The participation of the United States in World War II led to a substantial mobilization of domestic resources to produce the materiel used on the battlefields of Europe and in the Pacific. We produce new estimates for the impact of war mobilization on long-run economic growth and regional development in the United States over the postwar period. Guided by an economic geography model, we interpret our estimates as the direct effect of mobilization on local productivity. The findings suggest the largest likely aggregate welfare impact was modest, although there is variation across region. In addition, industrial mobilization contributed to manufacturing growth relatively more in the Northeast and Midwest, and less in the South and West.