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Vincent Geloso Profile picture
@VincentGeloso
Mar 6, 2023 • 9 tweets • 6 min read • Read on X
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Thread: New paper available at Social Science Quarterly (cc. @SSQ_Online) with @casey_joe on the myth of wartime prosperity. onlinelibrary.wiley.com/doi/10.1111/ss… #econhist #econtwitter
We take inspiration from Robert Higgs' 1992 "Myth of Wartime Prosperity" in the Journal of Economic History but shift from the USA to Canada.
Higgs had found that all claims of rising living standards were ill-founded. Most of this was the result of bad statistics, bad understanding of economics and wartime distortions to the meaningfulness of prices to convert quantities into "GDP" as a measure of wellbeing
Why Canada? Because it was in the war in 1939 rather than 1941 (i.e. more time to study) and it was also avoided the physical destruction. We also apply this to WW1. So, do we find the same results as Higgs?
Yes, we do. First, when we correct GDP numbers to concentrate on civilian well-being , we find that there was far smaller increases over the course of the war than the uncorrected figures do. This is true for WW1 as well.
When we correct for the disruptive effects of price controls on the deflator, we find that the war was merely a continuation of the Great Depression.
We also find that investments (private) were not above trends during either war. Similar finding for stock market data (from the TSX)
Again, the paper is here: onlinelibrary.wiley.com/doi/10.1111/ss…
cc. @ccoyne1 @IndependentInst @AlexNowrasteh @danieljmitchell @bryan_caplan @ATabarrok @tylercowen @CatoEdwards @edstringham @DrPatrickNewman

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More from @VincentGeloso

Vincent Geloso Profile picture
Jan 27
🧵Degrowth is everywhere. Its flagship framework is Kate Raworth’s Doughnut Economics: prosperity must stay within a “safe and just space” between social needs and planetary limits.

My recent paper in Contemporary Economic Policy shows the model is a stale doughnut that predicts nothing it purports to.Image
The doughnut model makes a strong claim: capitalism and growth inherently push societies out of that space and the result is imbalance, injustice, and ecological overshoot. In other words, we leave the doughy part of the doughnut.

It does not say that sometimes capitalism makes us leave the doughy part. It says that a much stronger, structural claim: that capitalism (sometimes and often presented as neoliberalism in Raworth's book) and growth are intrinsically incompatible with balanced development

Growth-oriented (she and others would say growth-fixated) market economies inevitably push societies out of the "safe and just space" by over-advancing some dimensions of well-being (notably income, consumption, and material output) while neglecting or degrading others (such as ecological stability, social cohesion, equality, and political voice).

In other words -- the growth imperative with all it implies (free markets, profit maximzation, capital accumulation -- markets ) leads to leaving the doughnut's doughy part.
Of all the degrowth models, it is by far the most popular and most cited. It racks up 1000 citations per year -- twice as much as the nearest competitor. Image
Read 13 tweets
Vincent Geloso Profile picture
Jan 12
David Friedman has tons of amazing papers. His best is the one below -- a short summary in 🧵 Image
Friedman’s core insight is that states expand and reshape themselves to maximize net extractable revenue, not to maximize welfare. Territory (and institutions) go to whoever values them most as tax bases, net of collection costs (and one could argue this could be extended to transaction costs)
If the state cares about extraction (a pure predator), what type of tax base affect nation size and shape. Do you tax trade, land (rents) or labor. Each implies a different political geography.
Read 7 tweets
Vincent Geloso Profile picture
Dec 4, 2025
I agree wholeheartedly. I am one of the big skeptics of the link between state capacity and growth (article 1). I also point out in multiple articles that there are big tradeoffs (articles 2 and 3) that people miss and that outcomes are often poorly defined (articles 4 and 5)
Article 1: Geloso, V. J., & Salter, A. W. (2020). State capacity and economic development: Causal mechanism or correlative filter?. Journal of Economic Behavior & Organization, 170, 372-385.

sciencedirect.com/science/articl…
Article 2: Geloso, V., Hyde, K., & Murtazashvili, I. (2022). Pandemics, economic freedom, and institutional trade-offs. European Journal of Law and Economics, 54(1), 37-61.

link.springer.com/article/10.100…
Read 6 tweets
Vincent Geloso Profile picture
Jul 21, 2025
🧵Now available! My paper with Ashruta Acharya and Alek Psrurek on the most generous engagement with the most influential "model" of degrowth. TLDR: It doesnt hold empirically. It predicts the opposite. Image
The "Doughnut Model" by Kate Raworth is the most influential framework in degrowth thinking. It claims sustainable development exists only between a "social foundation" and an "ecological ceiling." Outside that? Injustice or unsustainability. But does it hold up empirically? Image
In fact, it is worth noting that it is the most important degrowth model. Its annual citation count dwarves all the other by a league.Image
Read 15 tweets
Vincent Geloso Profile picture
Jun 13, 2025
🧵While everyone is discussing the new Piketty paper, I have (with Alexis Akira Toda) another paper, now conditionally accepted at Cliometrica, that points out a key flaw in his earlier work: the Pareto Interpolation method used to make shares from tabular data is bad.Image
Here is the origin of the problem. When you do not have micro-data and only tables of income where there are intervals (0$ to 1000$ etc. -- see image), you need some way of assuming distributing within intervals and across them. The usual method is Pareto interpolation. Image
Pareto interpolation essentially does this to estimate. Its not a bad method per se. Image
Read 16 tweets
Vincent Geloso Profile picture
Apr 29, 2025
Tje🧵There it is! The paper that disentangles Cuba's socialist revolution from Soviet Aid and the US trade embargo.

TLDR: The embargo explains nothing, Soviet aid ... aided (duh), and the Revolution takes the lion's share. Image
On the graph here, we used the Maddison Project Database and synthetic control to construct Cuba without the revolution, embargo, and Soviet Aid. The red line is the synthetic (counterfactual), orange is actual Cuba but with the "flawed" GDP numbers (flawed because they are largely assumed). The green uses John Devereux's recent reconstruction of Cuba's national account. The blue subtracts Soviet Aid.Image
As one can see, Cuba massively underperforms. However, the blue line is "Revolution minus Soviet Aid plus US embargo". How do we subtract embargo? We use data on trade openness and simulate the synthetic on that. Losses in trade are then expressed to GDP via the growth-enhancing effect of trade (parametrized from other studies and some "super liberal estimations to give the embargo the biggest size possible). The answer is that there was a great deal of trade diversion with other countries such that the lost openness was modest.Image
Read 7 tweets

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