World War II War Losses Quiz
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Questions and Answers

What percentage of human assets did the USSR suffer as a result of World War II?

  • 19%
  • 18% (correct)
  • 17%
  • 20%

    • How long did it take for GDP per capita to return to pre-war trends post-World War II?

  • Three decades
  • Four decades
  • One decade
  • Two decades (correct)

    • What type of economic recoveries were observed in countries with higher per capita income levels post-World War II?

  • Unchanged
  • Declining
  • Relatively fast (correct)
  • Slow and steady

    • Which country experienced 34% losses in physical assets due to World War II?

    <p>Japan</p> Signup and view all the answers

    What kind of approach did long-run city growth show in response to wartime destruction?

    <p>Asymptotic approach to economic activity and population growth</p> Signup and view all the answers

    In which country were fundamental institutional and political changes reflected in the GDP per capita?

    <p>East and West Germany</p> Signup and view all the answers

    What is the characteristic decline in real GDP per capita observed in financial crisis recessions compared to normal recessions?

    <p>$\geq5%$ decline</p> Signup and view all the answers

    What was a unique combination of factor prices in mid C18th England that led to the British Industrial Revolution?

    <p>Relatively high wages, cheap energy (coal), and cheap capital/low interest rates</p> Signup and view all the answers

    Why did the Dutch and the English have much more trade per capita than other countries in Europe in the eighteenth century?

    <p>Greater volume of trade explains why their wages were maintained (or increased) even as their populations grew</p> Signup and view all the answers

    What explains the initial condition of cheap coal in mid C18th England?

    <p>Geographical luck</p> Signup and view all the answers

    Why were wages high in mid C18th England?

    <p>C14th Plague and Commercial Revolution led to high wages</p> Signup and view all the answers

    In a path-dependent world, what can push the world economy onto a new path?

    <p>Disruptive events such as technological changes, geopolitics, climate change, and epidemics</p> Signup and view all the answers

    What are some reasons to study economic history according to the text?

    <p>To find natural experiments to identify causal effects, better understand rare event characteristics, and understand historical path-dependency which complements economic equilibrium analysis</p> Signup and view all the answers

    What is the primary focus of the course in Economic History Introduction?

    <p>Transition from pre-modern economic stagnation to modern economic growth</p> Signup and view all the answers

    What is the evaluation method for the course?

    <p>Final exam (80%) and case study (20%)</p> Signup and view all the answers

    When are the groups formed for the case study?

    <p>Self-select into groups on Canvas until Friday 5:00 PM of the first week; random allocation after that</p> Signup and view all the answers

    What is the recommended size for each group for the case study?

    <p>Four members</p> Signup and view all the answers

    What is the deadline for submitting the historical case study?

    <p>$5:00$ PM on Friday of week 7</p> Signup and view all the answers

    What are the sources provided for course materials?

    <p>$ ext{Lecture slides and book chapters}$</p> Signup and view all the answers

    What are the main topics covered in Week 4?

    <p>$ ext{The Great Divergence}$</p> Signup and view all the answers

    What is the primary method used in economics to establish causal relationships due to the lack of controlled experiments?

    <p>Observation and history</p> Signup and view all the answers

    Which economic event is cited as an example of a natural experiment in the text?

    <p>Effects of money supply changes using maritime disasters in the Spanish Empire</p> Signup and view all the answers

    What type of economic consequences are analyzed using long-run datasets and economic indicators?

    <p>Pandemics and wars</p> Signup and view all the answers

    What model is used to analyze the economic effects of pandemics and wars according to the text?

    <p>$Neoclassical$ growth model</p> Signup and view all the answers

    What is identified as a key factor impacting long-run growth after war according to the text?

    <p>$Technology$ and institutional deterioration</p> Signup and view all the answers

    What type of studies are lacking in post-war economic recoveries according to the text?

    <p>$Systematic$ large sample studies</p> Signup and view all the answers

    What does economic history provide insights into, using data from history as per the text?

    <p>$Natural$ experiments, rare event observations, and path-dependent insights</p> Signup and view all the answers

    What percentage of losses did Germany suffer in physical assets due to World War II?

    <p>25%</p> Signup and view all the answers

    What was the approximate decline in real GDP per capita observed in financial crisis recessions compared to normal recessions?

    <p>$≥5 ext{%}$</p> Signup and view all the answers

    What is the long-term trend of global capital market integration based on historical data?

    <p>Increasing trend with significant fluctuations over centuries</p> Signup and view all the answers

    Which country showed relatively fast economic recovery post-World War II?

    <p>Countries with higher per capita income levels</p> Signup and view all the answers

    What was the approximate percentage of income losses in financial crisis recessions?

    <p>$5 ext{%}$</p> Signup and view all the answers

    Which region experienced long-run effects due to more fundamental institutional and political changes?

    <p>$East$ and $West$ $Germany$</p> Signup and view all the answers

    What was the approximate percentage of losses suffered by the USSR in human assets due to World War II?

    <p>18-19%</p> Signup and view all the answers

    What is the primary method used in economics to establish causal relationships due to the lack of controlled experiments?

    <p>Longitudinal studies with historical data</p> Signup and view all the answers

    What model is used to analyze the economic effects of pandemics and wars according to the text?

    <p>Standard neoclassical growth model</p> Signup and view all the answers

    What type of economic consequences are analyzed using long-run datasets and economic indicators?

    <p>Economic effects of pandemics and wars</p> Signup and view all the answers

    In a path-dependent world, what can push the world economy onto a new path?

    <p>Random shocks and disturbances</p> Signup and view all the answers

    What are some reasons to study economic history according to the text?

    <p>To understand natural experiments, rare events, and long cycles</p> Signup and view all the answers

    What is identified as a key factor impacting long-run growth after war according to the text?

    <p>Technological innovation and institutional improvement</p> Signup and view all the answers

    What was a unique combination of factor prices in mid C18th England that led to the British Industrial Revolution?

    <p>High wages relative to capital costs</p> Signup and view all the answers

    What were the unique factor prices in mid C18th England that led to the British Industrial Revolution?

    <p>Relatively high wages, cheap energy (coal), and cheap capital/low interest rates</p> Signup and view all the answers

    What was the primary reason for the initial condition of cheap coal in mid C18th England?

    <p>Geographical luck</p> Signup and view all the answers

    What can push the world economy onto a new path in a path-dependent world?

    <p>Disruptive events such as technological changes, geopolitics, climate change, and epidemics</p> Signup and view all the answers

    Why didn’t the Plague lead to an equal wage increase everywhere?

    <p>Path-dependent system: no steady state from where to start and to which to return</p> Signup and view all the answers

    5

    <p>All of the above</p> Signup and view all the answers

    What were the factors that led to England's wages being maintained or increased even as their populations grew?

    <p>Greater volume of trade due to the greater trade per capita than other countries in Europe</p> Signup and view all the answers

    What explains the difference in Spinning Jennies between England and France?

    <p>Spinning Jennies were not cost-effective in France due to lower French wages.</p> Signup and view all the answers

    What explains the initial condition of high wages in mid C18th England?

    <p>C14th Plague and Commercial Revolution/Atlantic trade</p> Signup and view all the answers

    What type of events can push the world economy onto a new path in a path-dependent world?

    <p>Disruptive events such as technological changes, geopolitics, climate change, and epidemics.</p> Signup and view all the answers

    What is the primary method used in economics to establish causal relationships due to the lack of controlled experiments?

    <p>Observation and history</p> Signup and view all the answers

    What is an example of a natural experiment cited in the text?

    <p>Effects of money supply changes using maritime disasters in the Spanish Empire</p> Signup and view all the answers

    What model is used to analyze the economic effects of pandemics and wars according to the text?

    <p>Standard neoclassical growth model</p> Signup and view all the answers

    What type of economic consequences are analyzed using long-run datasets and economic indicators?

    <p>$GDP$ per capita growth rates</p> Signup and view all the answers

    What do recovery studies post-World War II primarily focus on?

    <p>$GDP$ per capita growth rates</p> Signup and view all the answers

    What is the characteristic decline in real $GDP$ per capita observed in financial crisis recessions compared to normal recessions?

    <p>More severe decline in real $GDP$ per capita</p> Signup and view all the answers

    Why is economic history considered a tool for understanding natural experiments, rare events, and long cycles?

    <p>As it offers insights from historical data into these phenomena</p> Signup and view all the answers

    What was the approximate percentage of losses suffered by Italy in physical assets due to World War II?

    <p>25%</p> Signup and view all the answers

    In which country did GDP per capita return to pre-war trends within two decades post-World War II?

    <p>Germany</p> Signup and view all the answers

    What type of decline in real GDP per capita is observed in financial crisis recessions compared to normal recessions?

    <p>$≥5%$ decline in real GDP per capita</p> Signup and view all the answers

    What is the long-term trend of global capital market integration based on historical data?

    <p>Increasing trend</p> Signup and view all the answers

    What is the relationship between debt and GDP considered as?

    <p>Key indicator of economic stability</p> Signup and view all the answers

    What type of approach did long-run city growth show in response to wartime destruction?

    <p>Asymptotic approach to economic activity and population growth</p> Signup and view all the answers

    What were the Great Recession and the Great Depression both preceded by, according to the text?

    <p>Increasing top income shares and debt-to-GDP ratios</p> Signup and view all the answers

    What was a key factor contributing to the British Industrial Revolution according to the induced innovation thesis?

    <p>High wages, cheap energy (coal), and low capital costs</p> Signup and view all the answers

    What was the approximate decline in the share of the workforce in agriculture during the British Industrial Revolution?

    <p>From about 75% to 35%</p> Signup and view all the answers

    What explains the initial condition of cheap coal in mid C18th England?

    <p>Geographical luck</p> Signup and view all the answers

    What was a significant reason for England's relatively high wages during the British Industrial Revolution?

    <p>$Wages = High imes (1 + \frac{Energy}{Capital})$</p> Signup and view all the answers

    What can push the world economy onto a new path in a path-dependent world?

    <p>Disruptive events such as technological changes, geopolitics, climate change, and epidemics</p> Signup and view all the answers

    Why didn’t the Plague lead to an equal wage increase everywhere?

    <p>'Path-dependent system: no steady state from where to start and to which to return'</p> Signup and view all the answers

    What were some reasons provided in the text for studying economic history?

    <p>To find natural experiments to identify causal effects, better understand rare event characteristics, and understand historical path-dependency.</p> Signup and view all the answers

    What explains the difference in Spinning Jennies between England and France?

    <p>Given lower French wages, cost-minimization in France implied employing more workers with old-fashioned spinning wheels rather than investing in novel Spinning Jennies.</p> Signup and view all the answers

    What were the factors that led to England's wages being maintained or increased even as their populations grew?

    <p>Greater volume of trade explains why their wages were maintained (or increased) even as their populations grew.</p> Signup and view all the answers

    Study Notes

    Economic History and Long-Term Effects

    • War losses: Human assets were significantly affected by World War II, with the USSR suffering 18-19% losses, while physical assets were also heavily impacted, with Germany, Italy, and Japan experiencing 25%, 17%, and 34% losses, respectively.
    • Post-WW2 economic recovery: GDP per capita returned to pre-war trends within two decades, with relatively fast economic recoveries observed in countries with higher per capita income levels.
    • Resilience of destroyed cities: Long-run city growth was remarkably resilient to wartime destruction, showing an asymptotic approach to economic activity and population growth.
    • Fundamental vs. proximate causes of growth: Regions subject to more fundamental institutional and political changes experienced long-run effects, as seen in the GDP per capita of East and West Germany.
    • Financial crises: The economic costs of systemic financial crises are substantial, characterized by banking sector distress and large losses of capital, resulting in public intervention, bankruptcy, or forced mergers.
    • Income losses in financial crises: Financial crisis recessions lead to a ≥5% decline in real GDP per capita, which is very persistent compared to the 1-2% fall in real GDP per capita observed in normal recessions.
    • Long cycles: Many important economic variables exhibit long cycles, including international capital and goods market integration, debt-to-GDP ratios, and income inequality.
    • Global capital market integration: Historical data shows a long-term trend of global capital market integration, with significant fluctuations over centuries.
    • Global goods market integration: The average trade ratio based on 17 developed economies has shown fluctuations over time, indicating the varying degrees of global goods market integration.
    • Debt-to-GDP ratio: The relationship between debt and GDP has been a key indicator of economic stability and has shown significant historical trends.
    • Income inequality: Data from Europe and the United States shows fluctuations in the top decile income share over the 20th century, with the United States becoming slightly more inegalitarian post-World War II.
    • Great Recession-Great Depression parallels: The Great Recession and the Great Depression were both preceded by rising top income shares and debt-to-GDP ratios, and were accompanied by financial crises, highlighting the interconnectedness of these phenomena.

    Using Economic History for Natural Experiments and Rare Events

    • Access to case study examples and literature resources available on Canvas, University library, and Google Scholar
    • Economic history as a tool for understanding natural experiments, rare events, and long cycles
    • Economic data in history can provide natural experiments, rare event observations, and path-dependent insights
    • Lack of controlled experiments in economics, reliance on observation and history for causal relationships
    • Example of natural experiment: effects of money supply changes using maritime disasters in the Spanish Empire
    • Specific example: maritime disasters in the Spanish Empire led to measurable effects on the economy
    • Economic consequences of pandemics and wars analyzed using long-run datasets and economic indicators
    • Analysis of the economic effects of pandemics and wars using a standard neoclassical growth model
    • Findings on the economic consequences of pandemics and wars consistent with the standard neoclassical growth model
    • Lack of systematic large sample studies on post-war economic recoveries, key take-aways from post-WW2 recovery studies
    • Recovery from severe destruction of capital and labor inputs after war, impact on long-run growth due to technology and institutional deterioration
    • Figure showing the economic effects of pandemics and wars in Europe, with implications for Covid-19 and the Russo-Ukrainian war

    Using Economic History for Natural Experiments and Rare Events

    • Access to case study examples and literature resources available on Canvas, University library, and Google Scholar
    • Economic history as a tool for understanding natural experiments, rare events, and long cycles
    • Economic data in history can provide natural experiments, rare event observations, and path-dependent insights
    • Lack of controlled experiments in economics, reliance on observation and history for causal relationships
    • Example of natural experiment: effects of money supply changes using maritime disasters in the Spanish Empire
    • Specific example: maritime disasters in the Spanish Empire led to measurable effects on the economy
    • Economic consequences of pandemics and wars analyzed using long-run datasets and economic indicators
    • Analysis of the economic effects of pandemics and wars using a standard neoclassical growth model
    • Findings on the economic consequences of pandemics and wars consistent with the standard neoclassical growth model
    • Lack of systematic large sample studies on post-war economic recoveries, key take-aways from post-WW2 recovery studies
    • Recovery from severe destruction of capital and labor inputs after war, impact on long-run growth due to technology and institutional deterioration
    • Figure showing the economic effects of pandemics and wars in Europe, with implications for Covid-19 and the Russo-Ukrainian war

    Economic History and Long-Term Effects

    • War losses: Human assets were significantly affected by World War II, with the USSR suffering 18-19% losses, while physical assets were also heavily impacted, with Germany, Italy, and Japan experiencing 25%, 17%, and 34% losses, respectively.
    • Post-WW2 economic recovery: GDP per capita returned to pre-war trends within two decades, with relatively fast economic recoveries observed in countries with higher per capita income levels.
    • Resilience of destroyed cities: Long-run city growth was remarkably resilient to wartime destruction, showing an asymptotic approach to economic activity and population growth.
    • Fundamental vs. proximate causes of growth: Regions subject to more fundamental institutional and political changes experienced long-run effects, as seen in the GDP per capita of East and West Germany.
    • Financial crises: The economic costs of systemic financial crises are substantial, characterized by banking sector distress and large losses of capital, resulting in public intervention, bankruptcy, or forced mergers.
    • Income losses in financial crises: Financial crisis recessions lead to a ≥5% decline in real GDP per capita, which is very persistent compared to the 1-2% fall in real GDP per capita observed in normal recessions.
    • Long cycles: Many important economic variables exhibit long cycles, including international capital and goods market integration, debt-to-GDP ratios, and income inequality.
    • Global capital market integration: Historical data shows a long-term trend of global capital market integration, with significant fluctuations over centuries.
    • Global goods market integration: The average trade ratio based on 17 developed economies has shown fluctuations over time, indicating the varying degrees of global goods market integration.
    • Debt-to-GDP ratio: The relationship between debt and GDP has been a key indicator of economic stability and has shown significant historical trends.
    • Income inequality: Data from Europe and the United States shows fluctuations in the top decile income share over the 20th century, with the United States becoming slightly more inegalitarian post-World War II.
    • Great Recession-Great Depression parallels: The Great Recession and the Great Depression were both preceded by rising top income shares and debt-to-GDP ratios, and were accompanied by financial crises, highlighting the interconnectedness of these phenomena.

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    Description

    Test your knowledge of World War II war losses attributable to physical destruction as a percentage of assets. This quiz covers human assets and physical assets of the Allied and Axis powers, including the USA, UK, USSR, Germany, Italy, and Japan.

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