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What Was the Consumer Price Index Then? A Data Study
Abstract
The purpose of this study is the generation of an annual long-run series of the consumer price index (CPI) for the United States. The desired series should be continuous, without missing years. Also, it should have maximum length; that is, (1) begin in the earliest year possible, consistent with acceptable data; and (2) continue to the present and be ongoing, meaning readily updatable for future years. A tremendous amount of original work on U.S. CPI series exists. Therefore no attempt here is made at original series construction. No one existing series, whether constructed by an official entity or private author, is of sufficient length to encompass the entire period for which data exist; therefore no such series alone can serve as the new series. Of necessity, the new CPI series is a composite of existing series, official and private. All the original series that the present author could find in the public domain are described and evaluated here. Other scholars have offered long-run series that are composites of these original series; all that the present author could find of such composite series are also reviewed, and the judgments of their authors considered in developing the new composite CPI series.
... In our work we drew on the handful of existing historical CPI reconstructions such as O' Donoghue et al. (2004) for the U.K., Officer et al. (2006) for the U.S., Söderberg (2010, 2011) for Sweden, Klovland (2014) for Norway, Radu (2019) for Denmark, as well as Pamuk (2000) and Özmucur and Pamuk (2002) for the Ottoman Empire. ...
In this paper we explore the long-term developments of consumer prices in Bulgaria for the period 1750-2020. The discussion draws on a component-based index of consumer prices constructed by the authors. We consider both nominal price-level time series and real prices of selected essentials (bread, meat, sugar, tobacco, alcohol, and construction goods used by households). For the reviewed period, we identify two major inflationary episodes, namely the two World Wars and the interwar period, and the period of post-communist transition. For the former, we compute an increase of the price level of about 46 times. For the latter, we arrive at a mind-blowing analogical result of over 3800 times. A curious finding concerns the communist period. Contrary to popular beliefs established through a massive propaganda of no-inflation socialist economies, we discover an overall increase of the price level for that period of nearly 4 times. Real prices of individual commodities are calculated by deflating nominal figures by the value of the corresponding base consumer price index. The inspection of their dynamics leads to uncovering hidden insight related to the developments of specific markets. Also, it allows to assess more clearly the similarities and differences of real price evolutions over different political regimes. For example, we find that the real price of bread in the times of communist rule did not contrast markedly with its levels in preceding and succeeding periods. Another example points to the conclusion that in the years of EU membership, the real prices of most commodities that we consider follow a path of decline. This suggests that statements on the economic developments in those years which rely heavily on the popular perception of lower affordability should at least be taken with a grain of salt. The availability of our results could facilitate further explorations into the nature and specifics of the economic and social development of Bulgaria over a long period of time.
... Only a sharp recession in 1921 would produce a decline. 5 1914 and 1915, around 1 percent, but accelerated sharply in 1916 and was historically high through the World War I period and the immediate postwar era. Prices then fell sharply during the steep recession of the early 1920s. ...
After 1922, however, relative price stability reigned for the rest of the decade. Prices rose an average of 1.4 percent annually from 1922 to 1926, then fell an average of 1.1 percent annually from 1926 to 1929. The 12-month change in the CPI stayed between a rise of 4.1 percent and a decline of 2.8 percent for the entire period, a clear contrast to the double-digit increases and decreases seen from 1916 to 1922. Food prices showed a little more volatility, with a notable spike in 1925. The relative stability that held from 1922 to 1929 did not, however, mean that policymakers didn’t concern themselves with price changes: vigorous debates about prices and attempts at major regulation characterized the period. The agricultural sector did not recover as well as the rest of the economy did from the recession of the early 1920s. Foreshadowing later efforts, concern about inadequately low agricultural prices sparked attempts at regulation in the late 1920s. President Coolidge repeatedly vetoed the McNary–Haugen bill, which would have established agricultural price supports in an attempt to restore relative prices received by agricultural producers to their 1909–1914 average.
The consumer price index series in the Historical Statistics of the United States, millennial edition, is improved via construction of a new long-run consumer price index series. For a component series, the author uses a neglected series developed by Paul Douglas. Although differences between the Historical Statistics series and the new series are not large, the Historical Statistics series nevertheless exhibits both conceptual and computational weaknesses when compared with the new series. Furthermore, the Historical Statistics series systematically diverges from the new series. In effect, the Historical Statistics series has two segments, which are improperly linked. Empirical evidence suggests the superior representativeness of the new series.
Introduction
The dominant influence on the progress of living standards in late Victorian and Edwardian Britain was not the rise in nominal incomes but the long-run movement in the cost of living. During the last quarter of the nineteenth century the principal source of the sustained rise in the general standard of living of the working class was the strong downward trend in the cost of food, fuel and other necessities. And at the end of the century, when the steady improvement of the late Victorian period gave way to what Beveridge (1923, p. 463) called ‘the cramped, uneasy, envious, but not impoverished age of Edward’, it was the abrupt transition from falling to rising prices which precipitated the turnaround in real incomes.
For many years now the standard source for the quantification of these trends in wages and prices has been the careful work of Bowley (1904, 1920, 1937) and Wood (1909). According to Bowley, real wages improved by some 55 per cent from 1873 to the turn of the century, and four-fifths of this advance was accounted for by the bonus of lower retail prices, leaving only one-fifth attributable to higher money wages (Bowley 1904, p. 459, 1937, pp. 30 and 122). The significance of this partitioning is that it meant that a generous windfall was immediately available to all those in receipt of some source of income, and did not have to be won through acquisition of skill or struggles with employers.
Introductory note Related publications Preface to the first edition Introduction Part I. From Parish Register Data to National Vital Series: 1. The basic data 2. The representativeness of the date 3. Inflation to national frequencies 4. From baptisms and burials to births and deaths: corrections for nonconformity and late baptism 5. From baptisms and burials to births and deaths: final inflation ratios: offsetting other causes of non-registration Part II. English Population History: 6. Secular trends: some basic patterns 7. Secular trends: back-projection estimates of population characteristics and vital rates 8. Short-term variations: some basic patterns 9. Short-term variation: vital rates, prices, and weather 10. The economic setting of long-term trends in English fertility and mortality 11. Conclusion Appendices Bibliography Index.
This is a study of the changing size of occupational classes, of their concomitant pay structure and the timing and circumstances of changes in this structure, in the period 1906–1960. In marshalling the facts about the numbers of people in the various broad occupational classes, Dr Routh has indicated the rise or fall of numbers in the occupations of which each class is composed, and the relation of these changes to the changing industrial structure of the economy. He also shows changes in participation rate by age and sex over the half-century, and makes some comparisons of the broad occupational structure of Britain with that of some other countries.
This paper adds new evidence to the standard of living debate. New wage data and new employment weights make it possible to assess nominal earnings growth from 1755 to 1851 for various labouring classes: farm labourers, unskilled urban, skilled urban, white collar, average blue collar, and the average worker. New cost of living data (augmented by rents) make it possible to assess real earnings growth. The pessimists' position is rejected, although the more skilled enjoyed the greater improvement. The paper then expands the assessment to include issues of unemployment, occupational mobility, regional migration, longevity, and the quality of life. These extensions fail to support the pessimists' position. We conclude that the time has come to shift attention to inequality issues, as well as to the counterfactual question "could Britain have done better"?
The author examines the influence of population on real wages and relative prices in England from the sixteenth to the twentieth century with particular reference to the data included in E. Anthony Wrigley and Roger S. Schofields "The Population History of England 1541-1871: A Reconstruction". The focus is on the debate between Malthusians and monetarists and the author concludes that Malthuss contention that population growth and falling real wages were causally linked is difficult to sustain. (ANNOTATION)
This sources and assessment of data should be an essential reference to economic historians and applied economists with an interest and use to the students of money and banking and to monetary economists of other countries. This classic book was first published in 1985.
During the eighteenth and nineteenth centuries London was the largest manufacturing city in Britain, where the mode of manufacture was typical of many of the "non-industrial" parts of the country. Increases in manufacturing productivity remained limited. Real wage rates-which, it is argued, provide a reasonably good guide to actual earnings-followed a pattern common to western Europe: at their peak around the mid-eighteenth century and on a declining trend for the next half century. Thereafter, they tended to rise. It is argued that the evidence for such long swings should be taken seriously, as should the corollary, that real wage rates may not have settled comfortably at the level of the mid-eighteenth century until a century later.
This study redresses the North and South imbalance of much work on economic and social history by focusing on the lives and economic impact of the building trade in the major urban centres of the North during the early modern period. The period 1450–1750 witnessed substantial changes in England: to the size of national population, the range of industry practised, the commodity structure and patterns of overseas trade; in agricultural techniques; and in the proportion of population tied to the soil. Using many hitherto unworked sources from local archives, the author challenges many prevailing orthodoxies. He addresses conditions of work in the building trades, levels of remuneration, the characteristics of the life cycles of male and female workers, gender differences in work, and relationships with employers.
The paper begins with a review of previous estimates of average earnings by Bowley and Wood and an analysis of their strengths and deficiencies. This is followed by a summary of the statistical procedures and definitions used in the construction of the new index, a comment on the reliability of the estimates, and a comparison with the earlier series. The final table gives both the average index and the separate indices for changes in earnings within sectors and changes between sectors; and annual estimates are also given for all the main constituent sectors. The detailed sources and methods are described in an appendix.
This article presents a new price series for seventeenth-century London and uses the data to construct the first cost of living index for the capital for that period. Comparison with the Phelps Brown Hopkins (PBH) series suggests that although short-term variations were very similar, there is some suggestion that prices in London were more inflationary after the middle of the seventeenth century than in the PBH series. A new London real wage series, also presented, is consequently less buoyant than that constructed by PBH for their southern building craftsmen.
Recent interpretations of the period of the classic industrial revolution (c. 1760-1820) are considered including claims that there was no marked discontinuity in economic growth in the eighteenth century and that the rate of British growth and changes in British living standards were not significantly different from those in western Europe. Trends in real wages are examined particularly, and new evidence is presented on real wages in north Staffordshire. Wage trends there support the traditional view that there was a growing disparity between the economic history of southern England and that of much of the rest of Britain and thus are compatible with traditional interpretations of an eighteenth-century industrial revolution.
The alternative measures of living standards proposed in this paper are imperfect substitutes for good real wage or personal income data. The subjective index of impoverishment can be calculated for each of Ireland's 32 counties, but refers only to the poor. The consumption of sugar, tea, and tobacco (with the possible exception of tobacco) captures trends in middle- and upper-class living standards only. Data on human capital formation may have a wider coverage but still suffer from a variety of limitations. These measures suggest a coherent story which is that neither a Malthusian horror tale nor a rosy revisionist view regarding the Irish economy as a rapidly developing entity does justice to a complex reality. The Irish poor almost certainly grew poorer during the half century or so before the Famine, but overall average incomes probably rose. This implies a sharpening of the inequality of income distribution. -from Authors
This article presents a new wage rate series for building workers in seventeenth-century London. It discusses this in the light of Woodward's recent examination of wages in northern towns, and places it in the context of what is known about the metropolitan labour market. The method employed identifies short periods when money wage rates for skilled workmen seem to fall. Despite this, over the seventeenth century, money wages doubled such that London retained its position as the high wage economy par excellence of Stuart England.
This article uses the earnings of clerks employed at the East India Company's London offices and warehouses to examine the emergence of age-related salary payment systems after 1790, and the growth of nominal and real incomes in one sector of the British middle class between 1760 and 1850. Middle-class spending patterns in London are examined and a new index of middle-class living costs for the period 1780-1850 is introduced. The article concludes that growth in the demand for clerical and administrative skills, and the introduction of age-related salary payment systems, resulted in the average real earnings of clerks doubling between 1780 and 1840, compared with an average increase of less than 10 per cent among manual workers.
Adds new evidence to the standard of living debate. New wage data and new employment weights make it possible to assess nominal earnings growth from 1755 to 1851 for various labouring classes: farm labourers, unskilled urban, skilled urban, white collar, average blue collar, and the average worker. New cost of living data (augmented by rents) make it possible to assess real earnings growth. The pessimists' position is rejected, although the more skilled enjoyed the greater improvement. The paper then expands the assessment to include issues of unemployment, occupational mobility, regional migration, longevity, and the quality of life.-from Authors