10-02-2016, 05:07 PM
(This post was last modified: 10-02-2016, 05:08 PM by Warren Dew.)
1945 was a war year, partially. 1946 was entirely a postwar year. Therefore, the change from 1945, which ended after the end of the war, to 1946, which both began and ended after the war, is absolutely part of the postwar change. Your excluding it is the worst of cherry picking. If we did the analysis month by month, the postwar period would likely look even worse due to including the immediate postwar months at the end of 1945; even my numbers are cherry picking in your favor a bit.
And again, look back at David Horn's post which started this discussion. He said, "witness the dramatic change between 1945 and 1973" in his argument for demand side Keynesianism (emphasis mine). That's why I used 1945-1973 even though, as you point out, 1973 was cherry picked in his favor a bit; my argument about the "early 1970s" being bad should include 1974 and 1975, both of which saw negative economic growth and would show the postwar years as being even worse, with growth at 1.6% rather than 1.8%.
As for the source of the data, I was using your site. However, while most of my numbers, including the key 1980-2000 number, are correct, I used the wrong denominator for 1980-2010. I will go back and correct that post.
So, let's do direct comparisons relative to the business cycle. For the postwar years from just before a recession to just before a recession, we'll use David Horn's 1945-1973 period. For an apples to apples comparison of the Reagan/Bush/Clinton years, we use my preferred period of 1980-2000, which is again just before a recession to just before a recession. (You could start it in 1980 if you wanted to exclude Carter's last year of growth, but the number is still the same.)
1945-1973 - 1.8% annual per capita GDP growth, prerecession to prerecession
1980-2000 - 2.3% annual per capita GDP growth, prerecession to prerecession
Supply stimulus is clearly better than demand side stimulus.
Or if you want to end the supply side period in 2010, just after a recession - three decades with one more contraction than expansion - the supply side record drops to 1.8%. But if you extend the postwar period to three decades by ending it in 1975, so that it also includes an extra cocntraction, it drops to 1.6%. So again, supply side stimulus works better.
Or, you can compare the two 1.8% periods, and the conclusion is that supply side stimulus with an extra recession is as good as demand side stimulus without the extra recession.
And again, look back at David Horn's post which started this discussion. He said, "witness the dramatic change between 1945 and 1973" in his argument for demand side Keynesianism (emphasis mine). That's why I used 1945-1973 even though, as you point out, 1973 was cherry picked in his favor a bit; my argument about the "early 1970s" being bad should include 1974 and 1975, both of which saw negative economic growth and would show the postwar years as being even worse, with growth at 1.6% rather than 1.8%.
As for the source of the data, I was using your site. However, while most of my numbers, including the key 1980-2000 number, are correct, I used the wrong denominator for 1980-2010. I will go back and correct that post.
So, let's do direct comparisons relative to the business cycle. For the postwar years from just before a recession to just before a recession, we'll use David Horn's 1945-1973 period. For an apples to apples comparison of the Reagan/Bush/Clinton years, we use my preferred period of 1980-2000, which is again just before a recession to just before a recession. (You could start it in 1980 if you wanted to exclude Carter's last year of growth, but the number is still the same.)
1945-1973 - 1.8% annual per capita GDP growth, prerecession to prerecession
1980-2000 - 2.3% annual per capita GDP growth, prerecession to prerecession
Supply stimulus is clearly better than demand side stimulus.
Or if you want to end the supply side period in 2010, just after a recession - three decades with one more contraction than expansion - the supply side record drops to 1.8%. But if you extend the postwar period to three decades by ending it in 1975, so that it also includes an extra cocntraction, it drops to 1.6%. So again, supply side stimulus works better.
Or, you can compare the two 1.8% periods, and the conclusion is that supply side stimulus with an extra recession is as good as demand side stimulus without the extra recession.