Origins and Developments of Irving Fisher’s Compensated Dollar Plan
"In 1911, Fisher published The Purchasing Power of Money. In chapter 13
of the first edition and in an appendix in the second section of 1913,
he introduced a rule to maintain the level of prices stable, called the
“compensated dollar”. According to this rule, the legal definition of
money is changed. In other words, the weight in gold of the dollar is
modified once a month in order to impede the price changes on a basket
of goods. According to Fisher, this plan will offer stability in the
purchasing power of money. He sought after to find an alternative system
to the price fix system under the Gold Standard. He wanted to introduce
a dollar fixed in his purchasing power, but variable in its metallic weight. In this paper we will focus on Fisher’s analysis on the
stability of money value and his position in the debate on the
compensated dollar from 1909 to 1922. We will study the anticipations of
Fisher’s compensated dollar, the receptions and evolutions of Fisher’s
project, the gold exchange standard and the algebraic evidence. We also
study the debate links to the question if the compensated dollar plan
match or not with the quantity theory of money. We ends with the
analysis of the gold price and elasticity of gold net supply, and we
explain the relation between the Yellowbacks and the varying price of
the gold reserve..."
Source: http://ideas.repec.org/p/ner/dauphi/urnhdl123456789-10190.html
File: http://basepub.dauphine.fr/xmlui/bitstream/123456789/10190
No comments:
Post a Comment