In the discussion of German and Japanese post-war growth, the text describes what happens when part of the capital stock is destroyed in a war. By contrast, suppose that a war does not directly affect the capital stock, but that casualties reduce the labour force. Assume that the economy was in a steady state before the war, the savings rate is unchanged, and the rate of population growth after the war returns to normal.
a. What is the immediate impact of the war on total output and on output per person?
b. What happens subsequently to output per worker in the postwar economy? Is the growth rate of output per worker after the war smaller or greater than normal?