Reinhart and Rogoff: The Federal Reserve's First Centennial

Reinhart and Rogoff: The Federal Reserve's First
Centennial
 - a noteworthy read.

The US price level from 1775 (set equal to one) until 2012. In 1913
prices were only about 20 percent higher than in 1775 and around 40 percent
lower than in 1813, during the War of 1812. Whatever the mandates of the
Federal Reserve, it is clear that the evolution of the price level in the
United States is dominated by the abandonment of the gold standard in 1933
and the adoption of fiat money subsequently. One hundred years after its
creation, consumer prices are about 30 times higher than what they were in
1913. This pattern, in varying orders of magnitudes, repeats itself across
nearly all countries.

 

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