Irving Fisher and His Compensated Dollar Plan

34 Pages Posted: 9 Nov 2012  

Don Patinkin

Hebrew University of Jerusalem (Deceased)

Date Written: 1993


In 1913 – following a 40-year period during which prices steadily declined for the first 25 years and then rose by 50 percent in the remaining 15 – Irving Fisher presented his compensated dollar plan for stabilizing the price level. This presentation had many puzzling features, starting with the fact that it failed to reflect the quantity-theory approach that Fisher had so vigorously expounded in his classic 1911 work on The Purchasing Power of Money. As a result of criticisms, Fisher subsequently modified his plan, and with the increasing importance of Federal Reserve monetary policy after World War I, effectively abandoned it in the 1930s – though in recent years it has received renewed, though not always accurate, attention.

Suggested Citation

Patinkin, Don, Irving Fisher and His Compensated Dollar Plan (1993). FRB Richmond Economic Quarterly, vol. 79, no. 3, Summer 1993, pp. 1-34. Available at SSRN:

Don Patinkin (Contact Author)

Hebrew University of Jerusalem (Deceased)

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