ABSTRACT
Since 1945 the United States economy has continued to experience alternating recessions and expansions in business activity. Leaving aside the fall in output following the end of the Second World War, there have been serious recessions in 1948–49, 1953–54, 1957–58 and 1960–61 when industrial production and employment fell sharply and for several months. Each was followed by an equally rapid, though short-lived (except in 1950), rise in output. In 1950 the expansion was prolonged by the Korean War rearmament. As well as these major fluctuations in activity there were marked pauses in expansions—substantial declines in the rate of growth—in 1951–52, 1962–63 and 1967. The fluctuations in the rate of growth of U.S. industrial output are shown in Fig. 1.1 which also indicates the conventional periods of business cycle expansion (from trough to peak in business activity) and contraction or recession (from peak to trough) determined by the National Bureau of Economic Research. These postwar fluctuations differ from those of the interwar period in several ways. As Table 1.1 shows, leaving aside the wartime expansion of 1938–45, postwar expansions have typically lasted longer than those in the interwar period, while postwar contractions have typically been of shorter duration than those earlier. More important, perhaps, is the fact that the extent of contractions, measured by the declines in industrial production, has been much less severe since 1945 than before. After the economy made its rapid conversion from war to peace in 1945, in not one of the four succeeding recessions did industrial production fall more than 15 per cent. In 1920–21, 1923–24 and 1937–38 the falls were much greater, while that of 1929–33 was disastrous. Only the 1926–27 fall was lighter than those after 1945. This mildness of postwar recessions is the main explanation of the absence since the end of the war of prolonged bouts of mass unemployment like those in 1921–22 and throughout the decade of the 1930s. Rate of Change of U.S. Industrial Production. https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9781315019710/a1105c0d-2e1f-4300-b8b8-54c46fa304f7/content/fig1_1_B.tif" xmlns:xlink="https://www.w3.org/1999/xlink"/> Source : FRB. Shaded areas represent periods of contraction determined by NBER as in Table 1.1. Chronology and Severity of U.S. Business Cycles 1919 to 1967
|
Dates * of |
Duration in months of |
Percentage Fall in Industrial |
||
|---|---|---|---|---|
|
Trough |
Peak |
Expansion |
Contraction † |
Production During Contraction ‡ |
|
March 1919 |
January 1920 |
10 |
18 |
32.4 |
|
July 1921 |
May 1923 |
22 |
14 |
17.9 |
|
July 1924 |
October 1926 |
27 |
13 |
6.1 |
|
November 1927 |
August 1929 |
21 |
43 |
53.4 |
|
March 1933 |
May 1937 |
50 |
13 |
32.4 |
|
June 1938 |
February 1945 |
80 |
8 |
31.4 |
|
October 1945 |
November 1948 |
37 |
11 |
8.3 |
|
October 1949 |
July 1953 |
45 |
13 |
100 |
|
August 1954 |
July 1957 |
35 |
9 |
14.3 |
|
April 1958 |
May 1960 |
25 |
9 |
7.5 |
|
February 1961 |
71 § |
|||
As determined by the National Bureau of Economic Research. See G. H. Moore and J. Shiskin, ‘Indicators of Business Expansions and Contractions’, NBER Occasional Paper 103 (New York: NBER, 1967), Appendix F, p. 113.
From peak in same line to trough in next line.
Measured from peak to trough in FRB Index of Industrial Production, whose peaks and troughs do not coincide exactly with the NBER business cycle peaks and troughs.
Up to December 1967 the expansion since February 1961 had lasted 71 months.
