The Depression as a Positive Productivity Shock
David Leonhardt quotes economic historian Alexander Field:
In 1941, the U.S. economy produced almost 40 percent more output than it had in 1929, with virtually no increase in labor hours or private-sector capital input
Sounds like a jobless recovery.
The Keynesian model of the Depression is that it was a problem of aggregate demand. The real business cycle model says that it was a negative productivity shock. The PSST model says that it was a transition from one pattern of specialization and trade to another, caused by a positive productivity shock. With tractors, farmers did not need laborers and tenant farming became uneconomical. With trucks, roads, and refrigeration, we needed less local meat and produce, so that farmland near cities could be converted to suburbs and returned to wilderness. In manufacturing, we needed a smaller fraction of labor devoted to production and more people to work on distribution and organization. More women found that their comparative advantage was in market work rather than housework. Thus, by 1950 we had very new patterns of specialization and trade.
I think something like that has been going on this decade. When this recession is over, my prediction as that we will see a very different composition of jobs and of the labor force. With much higher overall productivity.