Index numbers are used to make calculations of percent change easier. In Higgs’s chart, whatever the real GDP figure for 1939 is that figure is assigned an index number of 100. Then if the 1943 real GDP figure for 1943 is 48.6 percent larger than that for 1939, the index number for 1943 is 148.6.
Let’s say that real GDP is 1939 was $92.2 billion and that it was $137.0 billion in 1943. Then real GDP increased 48.6 percent from 1939 to 1943.
Like you, Higgs was incredulous that anyone would infer from these data that the actual standards of living of Americans rose by nearly 50 percent during the early part of the war. He wrote his article to rebut that conclusion.
Ok I thought for a minute that I had misunderstood it because the number was so insanely high that I figured it was down to a misreading of the table on my part. In a talk Higgs gave he said that it was a bit of strech to assume that America had their best growth in history with the best people of to sea and the inexperienced, young,old and women being left to do the rest. That statement alone should tell economists to think of the supposed data.
Anyway I delivered my paper and I want to thank you deeply because without your help it wouldn’t have been half as good. It has also been a very good learning experience. It certainly helped me understand more of the history economic thought and especially the divergences with keynesianism.