US Real GNP Growth in the 1880s

N.B.: In the original post, I made an error with Romer’s GNP figures: they were the nominal figures, and have now been corrected with the proper real GNP estimates.
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According to Balke and Gordon (1989: 84), we have these figures (with my calculations for the growth rates):

Year GNP* Growth Rate
1879 123.1
1880 137.6 11.77%
1881 142.5 3.56%
1882 151.6 6.38%
1883 155.3 2.44%
1884 158.1 1.80%
1885 159.3 0.75%
1886 164.1 3.01%
1887 171.5 4.50%
1888 170.7 -0.46%
1889 181.3 6.20%
1890 183.9 1.43%
* Billions of 1982 dollars

Average real GNP growth rate, 1880–1890: 3.76%.
(Balke and Gordon 1989: 84).

Some comments:

(1) The traditional figures show a depression in 1884–May, 1885. But this only shows up as low growth rates in 1884 and 1885 in Balke and Gordon. Unemployment (by previous estimates) is estimated to have risen to 7.5% in 1884–1885 (Sorkin 1997: 151).

(2) In May 1884, there was a banking panic in New York, and serious bank failures.

(3) The figures show a mild recession in 1888, which essentially agrees with the recession seen in the traditional data from March 1887–April 1888.

Romer’s (1989: 22) estimates are below (I add the growth rates by my own calculations):

Year GNP* Growth Rate
1879 127.675
1880 139.990 9.64
1881 143.580 2.56
1882 149.307 3.98
1883 152.097 1.86
1884 155.684 2.35
1885 157.789 1.35
1886 164.375 4.17
1887 169.453 3.08
1888 168.940 -0.3
1889 175.030 3.60
1890 182.964 4.53
* Billions of 1982 dollars

Average real GNP growth rate, 1880–1890: 3.35%.
(Romer 1989: 22).

Romer’s figures show the following:

(1) Only one mild recession in 1888. The traditional data shows a 1887–1888 recession.

(2) The 1884–1885 recession does not appear in the data, though 1885 saw the lowest positive growth rate of any year in the 1880s.

It is also notable that the average real GNP growth rate for 1880–1890 was 3.35% in Romer, and 3.76% in Balke and Gordon.


BIBLIOGRAPHY

Balke, N. S., and R. J. Gordon, 1989. “The Estimation of Prewar Gross National Product: Methodology and New Evidence,” Journal of Political Economy 97.1: 38–92.

Romer, C. D. 1989. “The Prewar Business Cycle Reconsidered: New Estimates of Gross National Product, 1869–1908,” Journal of Political Economy 97.1: 1–37.

Sorkin, A. L. 1997. “Depression of 1882-1885,” in D. Glasner and T. F. Cooley (eds), Business Cycles and Depressions: An Encyclopedia, Garland Pub., New York. 149-151.