Irving Fisher and Price-Level Targeting in Austria: Was Silver the Answer? / Richard C.K. Burdekin, Kris James Mitchener, Marc D. Weidenmier.

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Burdekin, Richard C.K

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w17123.Publication details: Cambridge, Mass. National Bureau of Economic Research 2011.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: The question of price level versus inflation targeting remains controversial. Disagreement concerns, not so much the desirability of price stability, but rather the means of achieving it. Irving Fisher argued for a commodity dollar standard where the purchasing power of money was fixed by indexing it to a basket of commodities. We show that movements in the price of silver closely track the movements in overall prices during the classical gold standard era. The one-to-one relationship between paper and silver bonds suggests that a simple "silver rule" could have sufficed to fix the purchasing power of money.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w17123 (Browse shelf(Opens below))	Not For Loan

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June 2011.

The question of price level versus inflation targeting remains controversial. Disagreement concerns, not so much the desirability of price stability, but rather the means of achieving it. Irving Fisher argued for a commodity dollar standard where the purchasing power of money was fixed by indexing it to a basket of commodities. We show that movements in the price of silver closely track the movements in overall prices during the classical gold standard era. The one-to-one relationship between paper and silver bonds suggests that a simple "silver rule" could have sufficed to fix the purchasing power of money.