Page:Stabilizing the dollar, Fisher, 1920.djvu/59

. 2] number 100 as compared with the price level of 1913 taken as 100. In other words it shows that, as between 1913 and 1914, prices averaged the same. The index number for 1917 was 176, and that for 1918, 196. That is, the prices in 1917 were, on the average, 76% higher than those of 1913, and in 1918, 96% higher, and consequently the prices of 1918 were, on the average, higher than those of 1917 in the ratio of 196 to 176.

Index numbers are a comparatively modern invention. Not many good ones have been calculated back of 1890, and still fewer back of 1860. Jevons, the English economist, who, more than any other man, was responsible for introducing the idea, computed an index number for England back to 1782. A few very rough index numbers have been computed back to the thirteenth century, and one, with some breaks, back even to the eighth century.

2. Medieval Price Levels

It is an interesting fact that, throughout the ages, while prices have sometimes fallen, they have generally risen. In France prices just before the war were four to six times as high as five hundred years ago and five to ten times as high as a thousand years ago.

We moderns are not the only ones to complain of the "high cost of living." In the sixteenth century people were complaining that wheat cost from three to ten times what it cost during the three preceding centuries. We are told that in 1447 £5 bought as much as £28 or £30 would buy in 1707. These fluctuations of prices are expressed in terms of metallic money. Where irredeemable paper money has been used, the