gwern comments on Rationality Quotes June 2012 - Less Wrong

4 Post author: OpenThreadGuy 02 June 2012 05:14PM

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Comment author: gwern 09 June 2012 01:32:44AM *  0 points [-]

Inflation in England in this period was, as far as I know, remarkably low and <1%, even experiencing periods of apparent deflation. (Whether it beat Roman Egypt Sixpence compounding might go a decent way. See also Gregory Clark, Farewell to Alms:

However, in preindustrial England, and indeed in many preindustrial economies, inflation rates were low by modern standards. Figure 8.7 shows the English inflation rate from 1200 to 2000 over successive forty-year intervals. Before 1914 inflation rates rarely exceeded 2 percent per year, even in the period known as the Price Revolution, when the influx of silver from the New World helped drive up prices. In a country such as England, which had a highly regarded currency in the preindustrial era, the crown did not avail itself of the inflation tax, despite the close restrictions Parliament placed on its other tax revenues. Only in the twentieth century did significant inflation appear in England. By the late twentieth century annual inflation averaged 4–8 percent per year. Thus there has been a decline, not an improvement, in the quality of monetary management in England since the Industrial Revolution.

...Thus in Roman Egypt wheat prices roughly doubled between the beginning of the first century AD and the middle of the third.^12^ But that reflects an inflation rate of less than 0.3 percent per year.