On the Welfare Costs of Business-Cycle Fluctuations and Economic-Growth Variation in the 20th Century

Lucas (1987) has shown a surprising result in business-cycle research: the welfare cost ofbusiness cycles are very small. Our paper has several original contributions. First, in computingwelfare costs, we propose a novel setup that separates the effects of uncertainty stemming frombusiness-cycle fluctuations and economic-growth variation. Second, we extend the sample from which to compute the moments of consumption: the whole of the literature chose primarily to work with post-WWII data. For this period, actual consumption is already a result of counter-cyclical policies, and is potentially smoother than what it otherwise have been in their absence. So, we employ also pre-WWII data. Third, we take an econometric approach and compute explicitly the asymptotic standard deviation of welfare costs using the Delta Method. Estimates of welfare costs show major differences for the pre-WWII and the post-WWII era. They can reach up to 15 times for reasonable parameter values -β=0.985, and ∅=5. For example, in the pre-WWII period (1901-1941), welfare cost estimates are 0.31% of consumption if we consider only permanent shocks and 0.61% of consumption if we consider only transitory shocks. In comparison, the post-WWII era is much quieter: welfare costs of economic growth are 0.11% and welfare costs of business cycles are 0.037% - the latter being very close to the estimate in Lucas (0.040%). Estimates of marginal welfare costs are roughly twice the size of the total welfare costs. For the pre-WWII era, marginal welfare costs of economic-growth and business- cycle fluctuations are respectively 0.63% and 1.17% of per-capita consumption. The same figures for the post-WWII era are, respectively, 0.21% and 0.07% of per-capita consumption.

A welfare comparison of pre- and post-WWII business cycles: some implications for the role of postwar macroeconomic policies

The authors compute the potential economic benefits that would accrue to a typical pre-WWII era U.S. worker from the post-WWII macroeconomic policy regime. The authors assume that workers face undiversifiable income risk but can self-insure by saving in nominal assets. The worker's average utility is computed for two eras: pre-WWII (1875-1941) and post-WWII. In the pre-WWII era, the worker endured business cycles that were large in amplitude and quite volatile, a procyclical aggregate price level with large cyclical amplitude, a high average unemployment rate, and virtually no trend in the aggregate price level. In the post-WWII era, the same worker would have encountered business cycles with smaller amplitude and less volatility, a countercyclical aggregate price level with small cyclical amplitude, a much lower mean unemployment rate, and a positive trend in the aggregate price level. Depending on what is assumed about the effects of macroeconomic policies on the mean and var iance of the unemployment rate, the potential gain in the worker's welfare ranges between -0.9 (if policies affected the inflation rate but not the mean or variance of the aggregate unemployment rate) to 4.19 percent of consumption (if policies affected the inflation rate and lowered the mean and variance of the aggregate unemployment rate).Business cycles ; Economic history

There Will be no Strength. (In)coherence and (Im)potency

In 1949, Czesław Miłosz spent a few days in Wroclaw, which was still in ruins after WWII. Six years later Miłosz wrote an interesting poem entitled Pokój (The Room) and created a symbolical vision of the city. The article discusses the style and meaning of the poem, and compares it with another (earlier) poem by Miłosz entitled In Warsaw, which also referred to a post-WWII, heavily destroyed city. This comparison reveals the convergences and differences between both texts

The Welfare Cost of Macroeconomic Uncertainty in the Post-War Period

Lucas (1987) has shown the surprising result that the welfare cost of business cycles is quite small. Using standard assumptions on preferences and a fully-fledged econometric model we computed the welfare costs of macroeconomic uncertainty for the post-WWII era using the multivariate Beveridge-Nelson decomposition for trends and cycles, which considers not only business-cycle uncertainty but also uncertainty from the stochastic trend in consumption. The post-WWII period is relatively quiet, with the welfare costs of uncertainty being about 0.9% of per-capita consumption. Although changing the decomposition method changed substantially initial results, the welfare cost of uncertainty is qualitatively small in the post-WWII era - about $175.00 a year per-capita in the U.S. We also computed the marginal welfare cost of macroeconomic uncertainty using this same technique. It is about twice as large as the welfare cost -$350.00 a year per-capita.welfare costs of business cycles, Beveridge-Nelson decomposition

MS – 211: Earman Family Letters from WWII

The collection contains 389 letters, 15 V-mail , and 166 additional items addressed to members of the Earman family home. The majority of the correspondence is sent from Ernest and Randolph to their mother, Mrs. Earman. Because the Earman brothers did not see much direct combat, the bulk of their letters are updates on health and daily activities, or candid observations on the war, the Army, the weather, and women. The rest of the collection includes letters addressed to the Earman family from distant or extended family, close friends, and Ernest’s foreign and domestic girlfriends. Many of the letters are (legibly) handwritten, though some were typed. While the majority of the items are well–preserved inside their original envelopes, eleven letters are without envelopes and seven envelopes are without accompanying letters; these items are marked as “envelope only” or “letter only.” Many envelopes contain a variety of printed ephemera or artifacts like clippings, programs, advertisements, and photographs. There were 31 photographs/ephemera which were not enclosed in any specific letter or envelope; these loose items have been grouped together in Series VIII (see description). There are brief gaps in correspondence which can be attributed to Army furloughs or overseas travel. Because some of the correspondence from Ernest, Randolph, and Granville (particularly the V–mail) was written under censorship, details about military location or movements have been omitted or physically removed from the letters. Historians researching WWII communication and censorship may be interested in the Vmail, telegrams, or letters from the soldiers immediately after they arrived overseas. The collection’s female writers offer a helpful gendered perspective of the war, both on the home–front and abroad. Jo Bush’s letters detail the life and training of a Cadet Nurse. Mrs. (Dorothy) Randolph Earman’s letters express the concerns of a wife and mother trying to manage a household while worrying about the absence of her husband. The letters from Ernest’s foreign (often romantic) acquaintances reveal how French and German women saw America, Americans, and WWII. Arguably the collection’s greatest strength is its view into the personal lives and relationships of U.S. soldiers while overseas. While he entertained multiple romantic interests during his time as a soldier, Ernest struck up a serious relationship in France with Catherine Seux, whom he hoped to marry one day after returning home. As time passed and marriage proved increasingly unlikely, Catherine’s progressively dejected letters—which end quite abruptly in Aug. 1946—give voice to foreign women who, charmed by American soldiers, hoped to marry and come to the United States but were met instead with cultural and economic setbacks. Special Collections and College Archives Finding Aids are discovery tools used to describe and provide access to our holdings. Finding aids include historical and biographical information about each collection in addition to inventories of their content. More information about our collections can be found on our website https://www.gettysburg.edu/special-collections/collections/. .https://cupola.gettysburg.edu/findingaidsall/1184/thumbnail.jp

Critters in the Workplace: Bedbugs

Unfortunately, critter infestations do exist in the workplace and people tend not to want to talk about them. All kinds of workplaces have had problems or infestations: hotels, hospitals, office buildings, department stores, and TV studios, as well as institutional environments such as prisons, old-age homes, daycare centers, nursing homes, schools, and orphanages. Unfortunately, critters can hop a ride home with us. Bedbugs have been associated with humans worldwide for thousands of years. Pre-WWII, it has been estimated that about 30% of American homes had bedbugs. But after WWII, many long-lasting pesticides were developed, making bedbugs rare for ~50 years. Then, in the late 1990s, a world-wide resurgence began, attributed to the use of less-toxic pesticides, bedbugs developing pesticide resistance, and an increase in international travel

Preference Formation and the Rise of Women's Labor Force Participation: Evidence from WWII

This paper presents intergenerational evidence in favor of the hypothesis that a significant factor explaining the increase in female labor force participation over time was the growing presence of men who grew up with a different family model--one in which their mother worked. We use differences in mobilization rates of men across states during WWII as a source of exogenous variation in female labor supply. We show, in particular, that higher WWII male mobilization rates led to a higher fraction of women working not only for the generation directly affected by the war, but also for the next generation. These women were young enough to profit from the changed composition in the pool of men (i.e., from the fact that WWII created more men with mothers who worked). We also show that states in which the ratio of the average fertility of working relative to non-working women is greatest, have higher female labor supply twenty years later.

Play it Again, Uncle Sam

Tashima, currently a federal judge, relates his experience in a Japanese American internment camp at Poston AZ during WWII. The unjust internment was in part a failure of the federal courts to protect the constitutional rights of American citizens

Private Lorraine J. Turnbull

Pvt. Lorraine Turnbull was one of the thousands of American women to enlist in the Marine Corps Women\u27s Reserve (MCWR) during the Second World War. Turnbull was one of the 500 women Marines selected out of a pool of 8,000 Women Reservists serving in the field of aviation for duty in Hawaii. Using hundreds of the letters written by Turnbull during her war experience, one is able to piece together the true impact of the war upon WWII military women. Using select letters written by Turnbull, this research project focuses on the elements of sexism women experienced in the MCWR, the significance of letter writing to these women, the true importance of the MCWR during WWII, and the overall expansion of opportunity given to Women Reservists through the MCWR

Sustainability of Public Debt: Evidence from Pre-World War II Japan

Japan defaulted on its public debts only once throughout its modern history, after World War II (WWII). How did Japan lose its ability to sustain its public debts? This paper explores the sustainability of public debts in Japan before and during WWII. First, this paper reviews the brief history of pre-WWII public finance in Japan with reference to some narrative evidence, data, and previous works. Second, this paper conducts three stages of econometric analyses. It tests Ricardian neutrality of public debt. It tests the dynamic efficiency of Japanese economy, and it conducts Bohn's tests for the relationship between public debt and primary fiscal balance. The tests indicate that Japanese public debts were sustainable until 1931, and unsustainable in and after 1932. Third, this paper interprets the results of quantitative analyses with narrative modes of analysis. During the 1930s, Japan lost its fiscal discipline because of the military's effective veto over budgetary processes and because of the absence of pressure for sound fiscal policy from international financial markets.Length: 35 pages