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From Central planning to the Market: The American Transition, 1945–1947

  • Robert Higgs (a1)

The orthodox view of U.S. reconversion after World War II relies on unacceptable GDP figures for the wartime economy and misinterprets the low level of unemployment during the war. For the postwar transtition, the emphasis on consumer demand financed by drawing down liquid assets accumulated during the war is inconsistent with the facts. The success of the transition depended on the reestablishement of “regime certainty,” which in turn depended on diminishing the influence of the more zealous New Dealers. Wartime and postwar political development created sufficient regime certainty for the postwar market system to generate genuine prosperity.

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Milton Friedman , and Anna Jacobson Schwartz . Monetary Trends in the United States and the United Kingdom. Chicago: University of Chicago Press, 1982.

John W. Jeffries The ‘New’ New Deal: FDR and American Liberalism, 1937–1945.Political Science Quarterly 105, no. 3 (1990): 397418.

Mark Skousen . “Saving the Depression: A New Look at World War II.” Review of Austrian Economics 2 (1988): 211–26.

J. A. Swanson , and S. H. Williamson . “Estimates of National Product and Income for the United States Economy, 1919–1941.” Explorations in Economic History 10, no. 1 (1972): 5373.

Richard K. Vedder , and Lowell E. Gallaway . “The Great Depression of 1946.” Review of Austrian Economics 5, no. 2 (1991): 331.

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The Journal of Economic History
  • ISSN: 0022-0507
  • EISSN: 1471-6372
  • URL: /core/journals/journal-of-economic-history
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