What is a brief explanation for why the economy recovered after WWII? As we know, the Keynesians were predicting a massive depression that never happened. But it’s not really enough to say resources were freed up by the demobilization, is it? Otherwise, you could argue let’s start a Krugmanian war and then the demobilization will free up resources. And it’s not like there was massive deregulation.
I’m somewhat familiar with some of Higgs’s work about wartime rationing, but I’d have to refresh my memory if he addressed this particular point.
