Origins and Developments of Irving Fisher’s Compensated Dollar Plan

Jérôme de Boyer Des Roches and Rebeca Gomez Betancourt
Additional contact information
Jérôme de Boyer Des Roches: LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

Post-Print from HAL

Abstract: 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.

Keywords: Quantity theory; compensated dollar; prices; gold exchange standard (search for similar items in EconPapers)
Date: 2012-06-22
Note: View the original document on HAL open archive server: https://hal.science/hal-01500410v1
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in History of Economic Society meeting, Jun 2012, St. Catharines, ON, Canada

Downloads: (external link)
https://hal.science/hal-01500410v1/document (application/pdf)

Related works:
Working Paper: Origins and developments of Irving Fisher's compensated dollar plan (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01500410

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().