Page:Stabilizing the dollar, Fisher, 1920.djvu/33

 SUMMARY BY SECTIONS

1. Index Numbers. An index number of prices shows the average percentage change of prices. Thus, taking 1913 as a basis for comparison and calling its price level 100%, the index number representing the price level of 1917 was 176%, and of 1918, 196%. There are many different methods of computing index numbers, but their results usually agree approximately (Figures 1 and 2.)

2. Medieval Price Levels. Prices have usually risen. In France, before the war, prices were five or ten times those of a thousand years before. Prices have often risen much more than this, especially after paper money inflation, as in the French Revolution, in the American Revolution, and in the present war, especially in Russia.

3. A Century and a Quarter of Price Movements before the Great War. (Figure 3.) Between 1789 and 1809 prices doubled in England; between 1809 and 1849 they fell all the way back, and more; between 1849 and 1873 they rose 50%. Between 1873 and 1896, in gold standard countries prices fell, while in silver standard countries prices rose. Between 1896 and 1914 prices in the United States and Canada rose 50%, and in the United Kingdom, 35%. xxix