Inflation since 1209

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Northern Flicker
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Inflation since 1209

Post by Northern Flicker » Wed Jun 24, 2020 11:53 pm

This is probably more well known to European BH users than American ones, but I found it interesting when I recently learned that the Bank of England has an inflation calculator (for UKP of course) going back to 1209.

https://www.bankofengland.co.uk/monetar ... calculator
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tetractys
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Re: Inflation since 1209

Post by tetractys » Wed Jun 24, 2020 11:58 pm

Cool! From 1209 to 2019 inflation averaged 0.9%.

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Re: Inflation since 1209

Post by Valuethinker » Thu Jun 25, 2020 4:21 am

tetractys wrote:
Wed Jun 24, 2020 11:58 pm
Cool! From 1209 to 2019 inflation averaged 0.9%.
But for any given sub period you can find very wide variations. So that's a case where the single statistic is not helpful.

Britain had bursts of inflation around major wars - government borrowing, restrictions on trade etc, to win the war. Then often deflation thereafter.

1939-45 was different. Inflation was artificially suppressed throughout the 1940s. Then it rose steadily for the next 25 years before exploding to 20%+ in many years of the 1970s.

The 1980s saw falling inflation (and a rise in unemployment to all-time highs, over 3 million) in the face of ruthless monetary policy (over 20% interest rates). That fall in inflation rates continued 1990-2008.

2008-09 saw the first real risk of deflation since the 1930s. The economy recovered but much more slowly than after previous recessions (even than after the 1929-31 depression - in the 1930s, Britain had a housebuilding boom). Real wages in 2018 were still lower than they had been in 2010, the first fall in real wages for that long a period ever recorded, since 1815. Now is the winter of our discontent ...

2016-19 was the era of Brexit uncertainty. We have politically exited the EU but transition arrangements keep things basically the same until January - after that, no one knows.

And then Covid-19 hit. We have the highest number of deaths in Europe, and almost the biggest negative impact on GDP.

All of which to say inflation has not been a problem since 2008, and does not look like it will be one going forward.

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Re: Inflation since 1209

Post by Robot Monster » Thu Jun 25, 2020 9:33 am

And in all that time not a single bout of hyperinflation. Doesn't mean it still couldn't happen, I suppose, but here's a good article explaining why it's unlikely...(applies to the U.S. as well as the U.K. I think)

https://moneyweek.com/economy/uk-econom ... appen-here

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Re: Inflation since 1209

Post by Kenkat » Thu Jun 25, 2020 9:45 am

If you use “since 1776“, inflation averaged 2.1% per year; 5.2% per year since 1940.

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tetractys
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Re: Inflation since 1209

Post by tetractys » Thu Jun 25, 2020 1:14 pm

Valuethinker wrote:
Thu Jun 25, 2020 4:21 am
tetractys wrote:
Wed Jun 24, 2020 11:58 pm
Cool! From 1209 to 2019 inflation averaged 0.9%.
But for any given sub period you can find very wide variations. So that's a case where the single statistic is not helpful.

Britain had bursts of inflation around major wars - government borrowing, restrictions on trade etc, to win the war. Then often deflation thereafter.

1939-45 was different. Inflation was artificially suppressed throughout the 1940s. Then it rose steadily for the next 25 years before exploding to 20%+ in many years of the 1970s.

The 1980s saw falling inflation (and a rise in unemployment to all-time highs, over 3 million) in the face of ruthless monetary policy (over 20% interest rates). That fall in inflation rates continued 1990-2008.

2008-09 saw the first real risk of deflation since the 1930s. The economy recovered but much more slowly than after previous recessions (even than after the 1929-31 depression - in the 1930s, Britain had a housebuilding boom). Real wages in 2018 were still lower than they had been in 2010, the first fall in real wages for that long a period ever recorded, since 1815. Now is the winter of our discontent ...

2016-19 was the era of Brexit uncertainty. We have politically exited the EU but transition arrangements keep things basically the same until January - after that, no one knows.

And then Covid-19 hit. We have the highest number of deaths in Europe, and almost the biggest negative impact on GDP.

All of which to say inflation has not been a problem since 2008, and does not look like it will be one going forward.
Sure. And if I’m remembering my history correctly, weren’t there extended periods of many hundreds of years with no inflation or deflation at all?

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Re: Inflation since 1209

Post by Valuethinker » Thu Jun 25, 2020 3:49 pm

tetractys wrote:
Thu Jun 25, 2020 1:14 pm
Valuethinker wrote:
Thu Jun 25, 2020 4:21 am
tetractys wrote:
Wed Jun 24, 2020 11:58 pm
Cool! From 1209 to 2019 inflation averaged 0.9%.
But for any given sub period you can find very wide variations. So that's a case where the single statistic is not helpful.

Britain had bursts of inflation around major wars - government borrowing, restrictions on trade etc, to win the war. Then often deflation thereafter.

1939-45 was different. Inflation was artificially suppressed throughout the 1940s. Then it rose steadily for the next 25 years before exploding to 20%+ in many years of the 1970s.

The 1980s saw falling inflation (and a rise in unemployment to all-time highs, over 3 million) in the face of ruthless monetary policy (over 20% interest rates). That fall in inflation rates continued 1990-2008.

2008-09 saw the first real risk of deflation since the 1930s. The economy recovered but much more slowly than after previous recessions (even than after the 1929-31 depression - in the 1930s, Britain had a housebuilding boom). Real wages in 2018 were still lower than they had been in 2010, the first fall in real wages for that long a period ever recorded, since 1815. Now is the winter of our discontent ...

2016-19 was the era of Brexit uncertainty. We have politically exited the EU but transition arrangements keep things basically the same until January - after that, no one knows.

And then Covid-19 hit. We have the highest number of deaths in Europe, and almost the biggest negative impact on GDP.

All of which to say inflation has not been a problem since 2008, and does not look like it will be one going forward.
Sure. And if I’m remembering my history correctly, weren’t there extended periods of many hundreds of years with no inflation or deflation at all?
Yes. 1815-1913 in particular, from memory.

My point was that the 0.9% average tells you relatively little about what you might expect for any sub period of less than 800 years.

It's not like there is some stable tendency that drags one back to 0.9% p.a. Instead what you get is these huge swings, and evidence of structural breaks (in particular, starting in 1939).

So yes we could say that if we invest for 800 years, we have 1 data point that says we should expect inflation to be about 0.9% pa (although I would expect most of that took place post 1945). Rather we have a "non stationary" time series (I may be misremembering the statistical term) i.e. one whose parameters are not stable (in graphic terms, it wonders around a lot and not predictably).

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Re: Inflation since 1209

Post by protagonist » Thu Jun 25, 2020 4:01 pm

I wonder what your investment would be worth if you went 100% in the All-Empire Index Fund at the peak of the Roman empire, during the reign of Marcus Aurelius in the latter part of the second century.

My guess is that it would have probably taken you 1600 years or more to break even.

We are still riding the crest of the wave of the Industrial Revolution, during a very extraordinary period in history. Perhaps the most extraordinary.
How long it will last is anybody's guess. Don't be lulled by recency bias.

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Re: Inflation since 1209

Post by mrb09 » Thu Jun 25, 2020 4:35 pm

This is useful, I was able to look up data for the famous quote, ""Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." from David Copperfield written in 1849. Turns out that's 2,560.22 pounds or $3180 US in today's dollars. I think I'd be challenged to live below that.

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Current Inflation Rate

Post by hudson » Thu Jun 25, 2020 4:37 pm


Helo80
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Re: Inflation since 1209

Post by Helo80 » Thu Jun 25, 2020 4:50 pm

Peer review my math...

1. Start with 1 pound here (lowest allowable amount)
https://www.bankofengland.co.uk/monetar ... calculator
2. I went to an interest calculator here:
https://www.calculator.net/interest-calculator.html
3. Inputted 1 as starting principal, zero annual/monthly contributions, 5% growth (conservative side of VTSAX), and after 810 years with a 0.9% inflation rate, I have:
Before inflation: $145,657,297,091,110,048.00
After inflation: $102,680,410,147,533.58

$102.68 trillion dollars.

Basically, retire today, cryogenically freeze myself, and wake up in 810 years and own Earth.

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Re: Inflation since 1209

Post by alfaspider » Thu Jun 25, 2020 4:52 pm

protagonist wrote:
Thu Jun 25, 2020 4:01 pm
I wonder what your investment would be worth if you went 100% in the All-Empire Index Fund at the peak of the Roman empire, during the reign of Marcus Aurelius in the latter part of the second century.

My guess is that it would have probably taken you 1600 years or more to break even.

We are still riding the crest of the wave of the Industrial Revolution, during a very extraordinary period in history. Perhaps the most extraordinary.
How long it will last is anybody's guess. Don't be lulled by recency bias.
Don't get me started about the all universe fund invested since the big bang. Billions of years with zero return :oops:

Mr. Rumples
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Re: Inflation since 1209

Post by Mr. Rumples » Thu Jun 25, 2020 5:21 pm

I'm afraid I'm too much of a VA history buff to place much value in what has happened since the 13th century, though it is interesting. In 1778, inflation in VA was estimated to be at almost 30%. Inflation during the Civil War in the south was cumulatively over 5,000%; one year it was over 800%. In the end, not even gold had value, as peas and pork were what was in demand when Richmond fell. (At least my Judah Benjamin $2 bills and my bonds have value again as collector's items.)

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Re: Inflation since 1209

Post by HenryPorter » Thu Jun 25, 2020 5:54 pm

Mr. Rumples wrote:
Thu Jun 25, 2020 5:21 pm
Inflation during the Civil War in the south was cumulatively over 5,000%; one year it was over 800%. In the end, not even gold had value, as peas and pork were what was in demand when Richmond fell. (At least my Judah Benjamin $2 bills and my bonds have value again as collector's items.)

I was going to ask how gold did since 1209. Then I read this. I wonder what an ounce of gold would have bought in the 1800's though.

EDIT: I looked up gold and from 1833 to about 1919 the price of gold was about $19 an ounce. Meaning I think currency was exchangeable for a set weight of gold statically during that period.

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Re: Inflation since 1209

Post by MarkRoulo » Thu Jun 25, 2020 6:04 pm

protagonist wrote:
Thu Jun 25, 2020 4:01 pm
I wonder what your investment would be worth if you went 100% in the All-Empire Index Fund at the peak of the Roman empire, during the reign of Marcus Aurelius in the latter part of the second century.

My guess is that it would have probably taken you 1600 years or more to break even.

We are still riding the crest of the wave of the Industrial Revolution, during a very extraordinary period in history. Perhaps the most extraordinary.
How long it will last is anybody's guess. Don't be lulled by recency bias.
Which is why the astute Roman investor avoids home empire bias and also invests in:
  • Chinese stocks
  • Meso-American bonds (uncorrelated AND you get a liquidity premium)
  • Emerging nordic equities
The empire’s stock market is also top-heavy with grain import/export so you can tilt a bit towards trireme construction firms.

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Re: Inflation since 1209

Post by MarkRoulo » Thu Jun 25, 2020 6:13 pm

Northern Flicker wrote:
Wed Jun 24, 2020 11:53 pm
This is probably more well known to European BH users than American ones, but I found it interesting when I recently learned that the Bank of England has an inflation calculator (for UKP of course) going back to 1209.

https://www.bankofengland.co.uk/monetar ... calculator
I am suspicious of these numbers.

The Great Debasement occurred from 1544 - 1551. Silver coins, as an example, lost about 2/3 of their silver content in those years.

The calculator shows 50% inflation TOTAL for those years.

https://en.wikipedia.org/wiki/The_Great_Debasement

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Re: Inflation since 1209

Post by Mr. Rumples » Thu Jun 25, 2020 6:25 pm

HenryPorter wrote:
Thu Jun 25, 2020 5:54 pm
Mr. Rumples wrote:
Thu Jun 25, 2020 5:21 pm
Inflation during the Civil War in the south was cumulatively over 5,000%; one year it was over 800%. In the end, not even gold had value, as peas and pork were what was in demand when Richmond fell. (At least my Judah Benjamin $2 bills and my bonds have value again as collector's items.)

I was going to ask how gold did since 1209. Then I read this. I wonder what an ounce of gold would have bought in the 1800's though.

EDIT: I looked up gold and from 1833 to about 1919 the price of gold was about $19 an ounce. Meaning I think currency was exchangeable for a set weight of gold statically during that period.
The caveat would be where there was currency. In much of the south until after the Civil War, there was little currency, towns were isolated, roads were few, the railroad was only just beginning to make an impact; it was mostly a barter system supplemented by currency issued by banks; some estimates are that almost 1,000 banks in the US issued their own currency. the Coinage Act of 1834 and the establishment of the Charlotte Mint in 1835 (which only minted gold coins) the problem really didn't go away until after 1865. The Coinage Act set the price of gold at $20.67 an oz.

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Re: Inflation since 1209

Post by willthrill81 » Thu Jun 25, 2020 6:42 pm

Valuethinker wrote:
Thu Jun 25, 2020 4:21 am
All of which to say inflation has not been a problem since 2008, and does not look like it will be one going forward.
I'm inclined to agree. Too many seem to be focusing on the increasing money supply, but at least in the U.S., the velocity of money has been steadily decreasing since about 2006, IIRC. In other words, money is changing hands at a slower and slower rate, which can counteract the inflation that would otherwise exist due to money supply, at least according to traditional finance thought.

In my estimation, the U.S. will see slight deflation in 2020 and roughly zero inflation in 2021. That estimate is worth what you paid for it.
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Re: Inflation since 1209

Post by protagonist » Thu Jun 25, 2020 7:57 pm

alfaspider wrote:
Thu Jun 25, 2020 4:52 pm
protagonist wrote:
Thu Jun 25, 2020 4:01 pm
I wonder what your investment would be worth if you went 100% in the All-Empire Index Fund at the peak of the Roman empire, during the reign of Marcus Aurelius in the latter part of the second century.

My guess is that it would have probably taken you 1600 years or more to break even.

We are still riding the crest of the wave of the Industrial Revolution, during a very extraordinary period in history. Perhaps the most extraordinary.
How long it will last is anybody's guess. Don't be lulled by recency bias.
Don't get me started about the all universe fund invested since the big bang. Billions of years with zero return :oops:
Actually negative return, if you were well- diversified, taking into account entropy. But local markets may have flourished. And investing during the inflationary period would have led to explosive returns, but you would have had to be quick since it was theoretically over 10*-32 seconds after the big bang. I doubt they had computers with the ability to trade that quickly back then anywhere in the universe, but then again, what do I know?
Last edited by protagonist on Sun Jun 28, 2020 11:53 am, edited 1 time in total.

austin757
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Re: Inflation since 1209

Post by austin757 » Thu Jun 25, 2020 8:11 pm

I find it amazing that we're able to track this back 800 years ago.

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Northern Flicker
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Re: Inflation since 1209

Post by Northern Flicker » Sat Jun 27, 2020 10:58 pm

Some interesting data from the calculator:

1209-1617 --- 0.2%
1618-1648 --- 1.3% (30 Year's War)
1649-1913 --- 0.2%
1914-1918 --- 19.4% (WW1)
1919-1939 --- 0.0%
1940-1941 --- 10.2% (Battle of Brittain WW2)
1942-1969 --- 3.5%
1970-1981 --- 13.5% (oil shock)
1982-2019 --- 3.8%

The 30 Year's War on the continent essentially was WW0.
Last edited by Northern Flicker on Sat Jun 27, 2020 11:15 pm, edited 1 time in total.
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Re: Inflation since 1209

Post by firebirdparts » Sat Jun 27, 2020 11:14 pm

After England started using the pound, the crown had to inflate the currency by decree, so that it became sterling early on, and then they reduced the weight, and so forth. I think the history of that is interesting. It's a very long history.

You know, a U.S. dollar was nominally an ounce when it was invented, so look today how close an ounce is to a pound.
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Re: Inflation since 1209

Post by Valuethinker » Sun Jun 28, 2020 9:06 am

Northern Flicker wrote:
Sat Jun 27, 2020 10:58 pm
Some interesting data from the calculator:

1209-1617 --- 0.2%
1618-1648 --- 1.3% (30 Year's War)
1649-1913 --- 0.2%
1914-1918 --- 19.4% (WW1)
1919-1939 --- 0.0%
1940-1941 --- 10.2% (Battle of Brittain WW2)
1942-1969 --- 3.5%
1970-1981 --- 13.5% (oil shock)
1982-2019 --- 3.8%

The 30 Year's War on the continent essentially was WW0.
Ish on the 30 Years War. If we say that WW1 & 2 were a single European Civil War w a 20 year ceasefire. A bit like the 100 Years War between England and France in 1300s and 1400s. Or 80 Years War in the 1500s to gain Dutch Independence from Spain.

The first truly global Wars were probably the 7 years War in 1760s between Britain and its Allies v the French and the Napoleonuc and French Revolutionary wars from 1793 to 1815. There was campaigning and conflict in all the known continents except Australia I think.

30 Years War did not spread as far as England Scotland Ireland except insofar as they fought their own civil wars from 1642 onwards.

Price indices during ww2 are fairly meaningless because UK had price controls and rationing which continued into the 1950s on many staple items.

The story from 1950 onwards is of steadily increasing inflation, pretty much, to the 20%+ years in the 1970s.

Since 1981 it is of pretty much steadily falling inflation. So the average is of less interest because it was high at the start and very low st the end.

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Re: Inflation since 1209

Post by Valuethinker » Sun Jun 28, 2020 9:08 am

firebirdparts wrote:
Sat Jun 27, 2020 11:14 pm
After England started using the pound, the crown had to inflate the currency by decree, so that it became sterling early on, and then they reduced the weight, and so forth. I think the history of that is interesting. It's a very long history.

You know, a U.S. dollar was nominally an ounce when it was invented, so look today how close an ounce is to a pound.
The origin of the English pound is Charlemagne s declaration of a new Holy Roman Empire & currency in 800 AD?

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Re: Inflation since 1209

Post by protagonist » Sun Jun 28, 2020 11:09 am

Northern Flicker wrote:
Sat Jun 27, 2020 10:58 pm
Some interesting data from the calculator:

1209-1617 --- 0.2%
1618-1648 --- 1.3% (30 Year's War)
1649-1913 --- 0.2%
1914-1918 --- 19.4% (WW1)
1919-1939 --- 0.0%
1940-1941 --- 10.2% (Battle of Brittain WW2)
1942-1969 --- 3.5%
1970-1981 --- 13.5% (oil shock)
1982-2019 --- 3.8%

The 30 Year's War on the continent essentially was WW0.
It would be interesting to see a similar calculator of economic growth over millenia.

As with inflation, I would expect, over the course of history, there to be some short periods of (unpredictable) explosive growth (such as the late 19th through 20th centuries) perforating what would otherwise be essentially long boring stretches of nearly a zero-sum game. This should give people who believe in the concept of "reversion to the mean" some pause when predicting , for example, equity growth going forward. What happened over the average of the 20th century is by no means a "mean". (an aside...given enough time it will undoubtedly be a zero-sum game since homo sapiens will not be around forever).

That would be compatible with chaos and complexity theory (that is how evolution works, for example), and, thinking more about it, which might even explain "inflationary periods" in the universe.

Are some of those intervals cherry-picked? For example, I would suspect "1919-1939" might actually be a period of high inflation followed by a period of deflation, whereas "0.0%' masks that as a flat period. Also, for example, the horribly devastating 30 years' war was teased out as an "era", but not the time of the great Plague within a 408 year period averaging 0.2% growth.

One thing that does stand out is how unusual and totally remarkable (by several other metrics as well) was the 20th century, as centuries go. By century (no cherry picking):

1900-2000 4.4%
1800-1900 -0.4%
1700-1800 0.9%
1600-1700 0.4%
1500-1600 1.4%
1400-1500 -0.1%
1300-1400 0.0%
1209-1300 0.7%

So almost all of the inflation from 1209-2000 happened in the 20th century. 100 GBP in 1209 would have only been worth 1657 GBP in 1900. In 2000 it would have been worth 120,998 GBP (and 205,198 GBP in 2019).

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Re: Inflation since 1209

Post by Valuethinker » Sun Jun 28, 2020 11:51 am

protagonist wrote:
Sun Jun 28, 2020 11:09 am
Northern Flicker wrote:
Sat Jun 27, 2020 10:58 pm
Some interesting data from the calculator:

1209-1617 --- 0.2%
1618-1648 --- 1.3% (30 Year's War)
1649-1913 --- 0.2%
1914-1918 --- 19.4% (WW1)
1919-1939 --- 0.0%
1940-1941 --- 10.2% (Battle of Brittain WW2)
1942-1969 --- 3.5%
1970-1981 --- 13.5% (oil shock)
1982-2019 --- 3.8%

The 30 Year's War on the continent essentially was WW0.
It would be interesting to see a similar calculator of economic growth over millenia.

As with inflation, I would expect there to be some short periods of (unpredictable) explosive growth (such as the late 19th through 20th centuries) perforating what would otherwise be essentially long boring stretches of essentially almost a zero-sum game. This should give people who believe in the concept of "reversion to the mean" some pause when predicting , for example, equity growth going forward. What happened in the 20th century is by no means a "mean". (an aside...given enough time it will undoubtedly be a zero-sum game since homo sapiens will not be around forever).
At least the conventional story.

Up until the early 1700s (say somewhere between 1710 and 1750) there is no net economic growth. There are only cycles.

Europe reached its peak wealth per capita around 200-something AD (reign of Marcus Aurelius?) and that was not reached again until well into the Renaissance if not the 1700s (I think that underrates the High Middle Ages before the coming of the Black Death in 1346 but there's certainly evidence for it).

So you get periods of population & economic collapse due to wars, plague, climate shifts etc. Then you get recovery & growth until eventually the population begins to push the limits of production and then you have another collapse. The period 1300-1400 in Europe, but again in the 1600s (the mini cold period that swept Europe in the 1550s+ (Geoffrey Parker wrote a whole book about it) may have been the direct result of the population collapse of North and South America post 1492 - the plagues brought to the New World plus the depredations of the Spanish and others led to a 90% fall in population, and that meant heavy reforestation, fall in atmospheric CO2 (rapid growth forests are the best absorbers) and so a drop in average temperatures). Certainly Elizabethan England was well into a "Dearth" crisis after 1601 (and Shakespeare's works get markedly more pessimistic and problematic - whether that was the result of increased Puritan prosecution of the theatre & the general rise of religious tensions at Court, his own marital and personal difficulties (including possibly venereal disease), or just old age is not known).

What happens in 1750?

- Britain had been able to build a massive biological surplus via the exploitation of plantations in the New World - a system of slavery unrivalled since the Romans (I think it was Hadrian who had all of Dacia, now Romania, enslaved to give him the prosperity for his amazing architectural works). This also contributed to a massive buildup of capital. Britain could afford to import food, which it started doing in the 1700s and has never been self-sufficient since.

One should not underestimate the impact of the potato, brought from the New World, in supporting much larger peasant populations.

- the Industrial Revolution happened, and it started in Britain. A combination of a rationalist scientific and intellectual culture, a government focused on commercial profit, the availability of capital, large landowners anxious to increase the commercial profits by building mills, ample water power (and later coal) etc.

- normally the population would surge to absorb this higher productivity. This time it did not.

Real growth per capita is less than 1.0% for the next 150 years - c 0.5%. But standards of living start a remorseless rise, with some bad disruptions (the end of the Napoleonic Wars and the Icelandic volcano leading to 1816- "the year without a summer".
That would be compatible with chaos and complexity theory (that is how evolution works, for example), and, thinking more about it, which might even explain "inflationary periods" in the universe.
I don't know enough about chaos and complexity theory (Sante Fe Institute?). I do know that "punctuated equilibrium" aka Stephen Jay Gould as most well-known exponent is hotly debated.
Are some of those intervals cherry-picked? For example, I would suspect "1919-1939" might actually be a period of high inflation followed by a period of deflation, whereas "0.0%' masks that as a flat period. Also, for example, the horribly devastating 30 years' war was teased out as an "era", but not the time of the great Plague within a 408 year period averaging 0.2% growth.
Actually I think it is the changes in the way inflation indices were calculated at those dates.

1919 saw "catch up" inflation (there had not been widespread price controls during WW1), and then a severe deflationary downturn in either 1924 or 1926 (Winston Churchill attempts to restore convertibility to the pre war Pound rate of $4.85 - the result is a flood of money out of the pound thus a shrinking money supply as gold reserves shrank, and then a Miner's Strike when the mine owners demanded lower wages and longer hours "not a penny off the pay, not a minute on the day" - Churchill was reviled by working class politicians forever after for his para-military interventions at that time.

1929-31 saw severe deflation. Britain suspended the pound's convertibility to gold (only a Tory government could get away with that). It became possible for a middle class family to get a mortgage for the first time (teachers, policemen, civil servants, clerks). And Britain had a housing boom - that decade saw more homes built than any other decade in British history other than the 1960s. The spread of the automobile, the fridge and the radio that was such a huge feature of Amerrica post WW1 came later in Britain, and slower, but it was a key feature of the 1930s.

So yes a brief burst of inflation followed by 2 severe bursts of deflation.
One thing that does stand out is how unusual and totally remarkable (by several other metrics as well) was the 20th century.
Really the period from the invention of the railway and the telegraph (1830s) onwards. The amplitude of technological change in Victorian times was in many ways as great as in our own era. In travel and communication times, those 2 technologies caused discontinuities that have never been exceeded. Manchester to London was 4 days by fast coach, and fell to 12 hours. The trans-oceanic telegraph meant news from NY that had taken a week by fast packet steamer became available in minutes.

The other was the development of municipal sewer systems. https://en.wikipedia.org/wiki/London_sewerage_system after 1858. And that was simply bringing us up to the level the Romans had reached in the 2nd Century AD.

Once the death rate of children dropped, the birth rate followed it down.

On inflation the 20th Century saw the greatest inflation in Europe since the arrival of the Spanish silver from the New World in the sort of 1540s onwards.

protagonist
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Re: Inflation since 1209

Post by protagonist » Sun Jun 28, 2020 12:05 pm

Valuethinker wrote:
Sun Jun 28, 2020 11:51 am

Europe reached its peak wealth per capita around 200-something AD (reign of Marcus Aurelius?) and that was not reached again until well into the Renaissance if not the 1700s
I would have guessed not until at least the mid-19th century , but then again, when speaking of nearly two millenia, what is a few centuries worth of error here or there? (FWIW, if this can be taken as a rough metric, acc. to Will Durant in The Story of Civilization, it was not until sometime in the 1800s that, on average, one could travel from Rome to London in the same amount of time or less than at the peak of Rome).

I would have thought that, per capita, Europe was still pretty dirt-poor during the Renaissance. Around 1400 Rome was still a fetid swamp and the Medicis in Florence were few and far between.

There may be some apt parallels to be made between the era of Marcus Aurelius (late 2d century) and the current era, particularly regarding optimism based on recency bias... aka "irrational exuberance". Almost 2 centuries of "Pax Romana" and growth, like today.

A major difference between the Roman Empire and the USA, that may have contributed to their belief that the glory of Rome would last forever, might be that "generally they changed their political, administrative and military systems at times, admittedly only after significant and extreme crises." (I read that somewhere....didn't make it up and cannot confirm or deny the theory, but it makes some intuitive sense).

(Please don't take my comments to imply that I am a bear. I am not. I am neither optimistic nor pessimistic about the future. I don't have enough info to predict the future, any more than Romans could in the year 200 despite all the supercomputers today, etc. , which is fine by me).

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Horton
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Re: Inflation since 1209

Post by Horton » Sun Jun 28, 2020 7:40 pm

1209?! Sounds like cherry picking...why not start in 1208 or 1210? :wink:

Valuethinker
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Re: Inflation since 1209

Post by Valuethinker » Mon Jun 29, 2020 4:25 am

protagonist wrote:
Sun Jun 28, 2020 12:05 pm
Valuethinker wrote:
Sun Jun 28, 2020 11:51 am

Europe reached its peak wealth per capita around 200-something AD (reign of Marcus Aurelius?) and that was not reached again until well into the Renaissance if not the 1700s
I would have guessed not until at least the mid-19th century , but then again, when speaking of nearly two millenia, what is a few centuries worth of error here or there? (FWIW, if this can be taken as a rough metric, acc. to Will Durant in The Story of Civilization, it was not until sometime in the 1800s that, on average, one could travel from Rome to London in the same amount of time or less than at the peak of Rome).

I would have thought that, per capita, Europe was still pretty dirt-poor during the Renaissance. Around 1400 Rome was still a fetid swamp and the Medicis in Florence were few and far between.
The focus of Europe had shifted to the Atlantic or at least north of the Alps. Paris and London were two of the foremost cities of medieval Europe. Oxford and Cambridge major centres of learning, etc. Rome, although the centre of western Christianity, had declined in importance.

The population collapse of the Black Death, beginning in 1346, meant that Europe did not regain the same GDP for perhaps 100 years? On the other hand the individual standard of living tended to rise, because the survivors could command higher wages.

Physical well-being of the population as a whole there's probably a case for 1700s - roads, water supply, etc.
There may be some apt parallels to be made between the era of Marcus Aurelius (late 2d century) and the current era, particularly regarding optimism based on recency bias... aka "irrational exuberance". Almost 2 centuries of "Pax Romana" and growth, like today.

A major difference between the Roman Empire and the USA, that may have contributed to their belief that the glory of Rome would last forever, might be that "generally they changed their political, administrative and military systems at times, admittedly only after significant and extreme crises." (I read that somewhere....didn't make it up and cannot confirm or deny the theory, but it makes some intuitive sense).

(Please don't take my comments to imply that I am a bear. I am not. I am neither optimistic nor pessimistic about the future. I don't have enough info to predict the future, any more than Romans could in the year 200 despite all the supercomputers today, etc. , which is fine by me).
Later Roman Republic comes more to mind, or Athens on the brink of the disastrous expedition to Syracuse in Sicily (not New York State ;-)).

Rome did, indeed, reinvent itself more than once. For example in the 200s-300s, there was a long run of military emperors from the Danube plain. Rome recovered from the crisis of the 3rd century. The political and military centre of the Roman Empire relocated to the Rhine-Danube area, where they had their Headquarters. Then of course there was the Roman city of Byzantium, late Constantinople, which became the centre of the new Rome.

You had the cultural-religious legacy of Rome, which was centred in the Church and Rome itself, which has lasted until the present day. Early Basilicas (places of meeting for provincial governors) became cathedrals, etc.

The political legacy of Rome was centred in Byzantium - and that lasted nearly another 1000 years (1452 AD).

Valuethinker
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Re: Inflation since 1209

Post by Valuethinker » Mon Jun 29, 2020 4:25 am

Horton wrote:
Sun Jun 28, 2020 7:40 pm
1209?! Sounds like cherry picking...why not start in 1208 or 1210? :wink:
It's when the available data starts.

protagonist
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Re: Inflation since 1209

Post by protagonist » Mon Jun 29, 2020 12:34 pm

Valuethinker wrote:
Mon Jun 29, 2020 4:25 am
protagonist wrote:
Sun Jun 28, 2020 12:05 pm
Valuethinker wrote:
Sun Jun 28, 2020 11:51 am

Europe reached its peak wealth per capita around 200-something AD (reign of Marcus Aurelius?) and that was not reached again until well into the Renaissance if not the 1700s
I would have guessed not until at least the mid-19th century , but then again, when speaking of nearly two millenia, what is a few centuries worth of error here or there? (FWIW, if this can be taken as a rough metric, acc. to Will Durant in The Story of Civilization, it was not until sometime in the 1800s that, on average, one could travel from Rome to London in the same amount of time or less than at the peak of Rome).

I would have thought that, per capita, Europe was still pretty dirt-poor during the Renaissance. Around 1400 Rome was still a fetid swamp and the Medicis in Florence were few and far between.
The focus of Europe had shifted to the Atlantic or at least north of the Alps. Paris and London were two of the foremost cities of medieval Europe. Oxford and Cambridge major centres of learning, etc. Rome, although the centre of western Christianity, had declined in importance.

The population collapse of the Black Death, beginning in 1346, meant that Europe did not regain the same GDP for perhaps 100 years? On the other hand the individual standard of living tended to rise, because the survivors could command higher wages.

Physical well-being of the population as a whole there's probably a case for 1700s - roads, water supply, etc.
There may be some apt parallels to be made between the era of Marcus Aurelius (late 2d century) and the current era, particularly regarding optimism based on recency bias... aka "irrational exuberance". Almost 2 centuries of "Pax Romana" and growth, like today.

A major difference between the Roman Empire and the USA, that may have contributed to their belief that the glory of Rome would last forever, might be that "generally they changed their political, administrative and military systems at times, admittedly only after significant and extreme crises." (I read that somewhere....didn't make it up and cannot confirm or deny the theory, but it makes some intuitive sense).

(Please don't take my comments to imply that I am a bear. I am not. I am neither optimistic nor pessimistic about the future. I don't have enough info to predict the future, any more than Romans could in the year 200 despite all the supercomputers today, etc. , which is fine by me).
Later Roman Republic comes more to mind, or Athens on the brink of the disastrous expedition to Syracuse in Sicily (not New York State ;-)).

Rome did, indeed, reinvent itself more than once. For example in the 200s-300s, there was a long run of military emperors from the Danube plain. Rome recovered from the crisis of the 3rd century. The political and military centre of the Roman Empire relocated to the Rhine-Danube area, where they had their Headquarters. Then of course there was the Roman city of Byzantium, late Constantinople, which became the centre of the new Rome.

You had the cultural-religious legacy of Rome, which was centred in the Church and Rome itself, which has lasted until the present day. Early Basilicas (places of meeting for provincial governors) became cathedrals, etc.

The political legacy of Rome was centred in Byzantium - and that lasted nearly another 1000 years (1452 AD).
Thank you for that.

protagonist
Posts: 6451
Joined: Sun Dec 26, 2010 12:47 pm

Re: Inflation since 1209

Post by protagonist » Mon Jun 29, 2020 12:40 pm

Valuethinker wrote:
Mon Jun 29, 2020 4:25 am
Horton wrote:
Sun Jun 28, 2020 7:40 pm
1209?! Sounds like cherry picking...why not start in 1208 or 1210? :wink:
It's when the available data starts.
I still think it is important to look at arbitrarily defined periods...eg centuries....to avoid cherry picking....if one does that one recognizes how unusual and remarkable the past century was (the current one that recently started is anybody's guess). Take the 20th out of the equation and there was very little inflation over ~700 years. And if you backed up another millenium or so to the height of Rome you might find it was all a zero-sum game.

This is not just an interesting point, it is an important one, for those who think "reversion to the mean" is at all meaningful when dealing with a mere 100 or so years of data (inflation, growth, market prices, interest levels, anything really) and trying to look forward another 20, 30 or 50 through their retirement.

1900-2000 4.4%
1800-1900 -0.4%
1700-1800 0.9%
1600-1700 0.4%
1500-1600 1.4%
1400-1500 -0.1%
1300-1400 0.0%
1209-1300 0.7%

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