Searching for Irving Fisher

31 Pages Posted: 25 Jan 2010 Last revised: 27 Apr 2023

See all articles by Kris James Mitchener

Kris James Mitchener

Santa Clara University - Leavey School of Business - Economics Department; National Bureau of Economic Research (NBER); CEPR; CAGE; CESifo (Center for Economic Studies and Ifo Institute)

Marc Weidenmier

Claremont McKenna College - Robert Day School of Economics and Finance; National Bureau of Economic Research (NBER)

Date Written: January 2010

Abstract

There is a long-standing debate as to whether the Fisher effect operated during the classical gold standard period. We break new ground on this question by developing a market-based measure of general inflation expectations during the gold standard. Since the gold-silver price ratio was widely used to track inflation during the gold standard period, we are able to derive a measure of inflation expectations using the interest-rate differential between Austrian silver and gold perpetuity bonds with identical terms. Our empirical evidence suggests that inflation expectations exhibited significant persistence at the weekly, monthly, and annual frequencies. We also find that market participants updated long-run inflation expectations following short-run changes in the forward silver price of gold. The evidence suggests the operation of a long-run Fisher effect during the classical gold standard period.

Suggested Citation

Mitchener, Kris James and Weidenmier, Marc D., Searching for Irving Fisher (January 2010). NBER Working Paper No. w15670, Available at SSRN: https://ssrn.com/abstract=1540955

Kris James Mitchener (Contact Author)

Santa Clara University - Leavey School of Business - Economics Department ( email )

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HOME PAGE: http://lsb.scu.edu/~kmitchener/

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Marc D. Weidenmier

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

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United States

National Bureau of Economic Research (NBER)

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United States

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