In 1913 – following a 40-year period during which prices steadily declined for the first 25 years and then rose by 50 percent in the remaining 15 – Irving Fisher presented his compensated dollar plan for stabilizing the price level. This presentation had many puzzling features, starting with the fact that it failed to reflect the quantity-theory approach that Fisher had so vigorously expounded in his classic 1911 work on The Purchasing Power of Money. As a result of criticisms, Fisher subsequently modified his plan, and with the increasing importance of Federal Reserve monetary policy after World War I, effectively abandoned it in the 1930s – though in recent years it has received renewed, though not always accurate, attention.
Our Research Focus: Monetary History
Amanda L. Kramer
To receive a notification by email when Economic Quarterly is posted online or to order single copies of past issues, click on the links below (published online only since 2012).