Review of Austrian Economics - The Ludwig von Mises Institute

6 The Review of Austrian Economics, Vol. 5, No. 2
quantitative economists who rhetorically were selling the new economics
of Keynes on the grounds that the evidence of the 1929-41
downturn showed the empirical bankruptcy of market-oriented economic
doctrines were ignoring, perhaps deliberately, the 1944-47
empirical evidence that was devastating to the Keynesian paradigm.
(6) A market-Austrian intrepretation of this historical episode is
very much more in keeping with the evidence.
Statistics Do Lie
Some official Department of Commerce statistics on this historical
episode as they were published in 1960, and as they were published
in 1990, are included in table 1. Note that every single series has
somewhat different numbers in 1990 than in 1960. Changes are
comparatively minor for money GNP, the civilian unemployment
rate, and civilian unemployment, but they are substantial for price
changes as measured by the GNP price deflator and, as a consequence,
for real GNP. Table 2 summarizes the percent change in the
five statistics over the 1944-47 period.
Between 1960 and 1990, government economists approximately
doubled their estimate of the inflation occuring from 1944 to 1947,
thereby causing the estimated real GNP decline to more than double.
Table 1
Some Key Economic Indicators
as Reported in 1960 and in 1990
Data Reported in 1960 Data Reported in 1990
Indicator 1944 1947 1944 1947
Civilian Unemployment Rate
Civilian Unemployment
GNP Price Deflator
Money GNP
Real GNP
1.2%
670 a
115 b
$211.4 d
$183.6 M 3.6%
2,142 a
141 b
$234.9 d
$165.6 bd 1.2%
670 a
15.3 C
$211.4 d
$l,380.6 cd 3.9%
2,311 a
22.1 C
$235.3 d
$l,066.7 c ' d
a In thousands
b 1929 dollars
C 1982 dollars
d In billions
Sources: 1960 Data: Historical Statistics of the United States, Colonial Times to
1957; 1990 Data: Economic Report of the President, 1990.