Another Depression Chart

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Eric Rauchway sent me another chart that helps illustrate the issue of the puzzling Cole/Ohanian theory that there was no demand-driven recovery from the Great Depression:

According to Cole and Ohanian, demand-driven changes in output can be distinguished from productivity-driven ones, because they’re manifested by changes in hours worked. On this chart, it becomes very difficult to miss the Depression-era collapse in the demand for workers, and recovery of demand during the mid-30s and during World War II. You also see that there was a long-term structural transition to more leisure, but that the line tends to squiggle around with the business cycle. But the Depression is no squiggle. It’s there plain as day, as is the recovery.