Chapter 2: Inflation and Monetary Regimes
1 2.1 INFLATIONS: LONG-TERM HISTORICAL EVIDENCE We turn first to the long-term development of inflation since about 1800 in several countries belonging for decades to the most highly developed economies of the world (Figure 2.1). On the vertical axis the logarithm of the cost of living index, CPI, is depicted, whereas time is denoted on the horizontal axis. We have used the logarithm of CPI since CPI itself would not fit on the page. As we can see from the figure, the price levels of the United States, Great Britain, France and Switzerland do not show an upward or downward trend 1790 = 2 4.8 4.3 ln(CPI) 3.8 3.3 2.8 2.3 1.8 1750 1810 1830 1850 1870 1890 1910 1930 1950 1970 1990 1790/92 1913/14 1998 Year GB France Switzerland USA Sources: Mitchell (1976), pp. 735–47. Statistisches Bundesamt (1981), pp. 704–6. US Bureau of the Census (1976), Historical Statistics of the United States: Colonial Times to 1970. Bicentennial Edition. Statistisches Bundesamt (2000), pp. 230f. Figure 2.1 Development of cost of living indices in four countries (logarithms) 3 4 Monetary regimes and inflation 2600 2100 %, 1950 = 100 1600 1100 600 100 1950 1960 1965 1970 1975 1980 1985 1990 1995 2000 Year (West) Germany France Switzerland Italy USA See Figure 2.1. GB Sources: Figure 2.2 Development of cost of living indices in six countries, 1950–2000 before 1914, but only long-term swings. The situation changes, however, after 1914 and at least from 1930, since a pronounced upward trend,...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.