Wartime recovery and bank balance sheets

Paul Krugman poses a very good question.  He points to:

…the role of WWII in cleaning up private-sector balance sheets.
During the war years there was very little private borrowing, thanks at
least in part to wartime restrictions; meanwhile there was both strong
economic growth and a lot of inflation. The result by the war’s end was
a very low private debt level relative to GDP.

How big a role did these improved balance sheets play in the fact that the postwar economy didn’t fall back into depression?

The economic history of these years, in my view, still remains to be written.


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