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Excerpt ​

Excerpt from Price/Cost Indexes from 1875 to 1989; Estimated to 2010, by Michael Hart

YEAR: 1927

2010 19.532409 0.051197 4% Est.
2009 18.781162 0.053245 4% Est.
2008 18.058809 0.055375 4% Est.
2007 17.364245 0.057590 4% Est.
2006 16.696381 0.059893 4% Est.
2005 16.054215 0.062289 4% Est.
2004 15.436751 0.064780 4% Est.
2003 14.843022 0.067372 4% Est.
2002 14.272144 0.070067 4% Est.
2001 13.723210 0.072869 4% Est.
2000 13.195395 0.075784 4% Est.
1999 12.687878 0.078815 4% Est.
1998 12.199887 0.081968 4% Est.
1997 11.730658 0.085247 4% Est.
1996 11.279482 0.088657 4% Est.
1995 10.845653 0.092203 4% Est.
1994 10.428514 0.095891 4% Est.
1993 10.027420 0.099727 4% Est.
1992 9.641747 0.103716 4% Est.
1991 9.270910 0.107864 4% Est.
1990 8.914337 0.112179 4% Est.
1989 8.571478 0.116666 3.8744%
1988 8.251770 0.121186 3.3218%
1987 7.986474 0.125212 3.1640%
1986 7.741536 0.129173 2.6144%
1985 7.544297 0.132550 2.9715%
1984 7.326590 0.136489 3.6576%
1983 7.068066 0.141481 3.8998%
1982 6.802770 0.146999 6.3831%
1981 6.394597 0.156382 9.6843%
1980 5.830002 0.171527 9.0330%
1979 5.347008 0.187020 8.8650%
1978 4.911594 0.203600 7.2813%
1977 4.578240 0.218425 6.6558%
1976 4.292536 0.232963 6.4073%
1975 4.034063 0.247889 9.8159%
1974 3.673478 0.272222 9.0909%
1973 3.367356 0.296969 6.4509%
1972 3.163295 0.316126 4.7304%
1971 3.020417 0.331080 5.7132%
1970 2.857182 0.349995 5.5272%
1969 2.707533 0.369340 5.5714%
1968 2.564646 0.389917 5.0148%
1967 2.442177 0.409471 2.5719%
1966 2.380942 0.420002 3.5485%
1965 2.299350 0.434905 2.7360%
1964 2.238116 0.446804 1.5423%
1963 2.204121 0.453696 1.5697%
1962 2.170058 0.460817 2.2421%
1961 2.122469 0.471149 0.9709%
1960 2.102061 0.475724 1.6442%
1959 2.068058 0.483546 2.3579%
1958 2.020417 0.494947 2.0623%
1957 1.979591 0.505155 3.5571%
1956 1.911594 0.523124 3.3098%
1955 1.850351 0.540438 3.4226%
1954 1.789116 0.558935 1.5421%
1953 1.761944 0.567555 1.5703%
1952 1.734704 0.576467 1.5948%
1951 1.707473 0.585661 5.0183%
1950 1.625881 0.615051 1.7034%
1949 1.598649 0.625528 -0.4250%
1948 1.605472 0.622870 6.7886%
1947 1.503411 0.665154 13.9149%
1946 1.319768 0.757709 22.7896%
1945 1.074820 0.930388 3.2661%
1944 1.040826 0.960775 1.3234%
1943 1.027232 0.973490 2.7232%
1942 1.000000 1.000000 6.5229%
1941 0.938765 1.065229 6.1527%
1940 0.884354 1.130769 2.3623%
1939 0.863945 1.157481 -1.5482%
1938 0.877531 1.139561 -1.5312%
1937 0.891177 1.122112 3.9669%
1936 0.857173 1.166625 0.0000%
1935 0.857173 1.166625 3.2811%
1934 0.829942 1.204904 8.9328%
1933 0.761884 1.312535 -2.6088%
1932 0.782293 1.278293 -11.5407%
1931 0.884354 1.130769 -8.4517%
1930 0.965997 1.035200 -2.7367%
1929 0.993177 1.006870 0.0000%
1928 0.993177 1.006870 -0.6823%
1927 1.000000 1.000000 0.0000%
1926 1.000000 1.000000 -2.0001%
1925 1.020409 0.979999 0.6731%
1924 1.013586 0.986596 2.0549%
1923 0.993177 1.006870 0.0000%
1922 0.993177 1.006870 2.8137%
1921 0.965997 1.035200 -7.1894%
1920 1.040826 0.960775 -13.0688%
1919 1.197298 0.835214 15.7925%
1918 1.034003 0.967115 14.2845%
1917 0.904762 1.105263 16.6637%
1916 0.775530 1.289441 20.0069%
1915 0.646238 1.547418 9.1939%
1914 0.591826 1.689685 2.3510%
1913 0.578232 1.729410 1.1940%
1912 0.571409 1.750060 1.1977%
1911 0.564646 1.771021 2.4765%
1910 0.551000 1.814881 0.0000%
1909 0.551000 1.814881 3.8464%
1908 0.530592 1.884689 0.0000%
1907 0.530592 1.884689 -2.5073%
1906 0.544237 1.837433 5.2689%
1905 0.516997 1.934246 2.6987%
1904 0.503411 1.986447 0.0000%
1903 0.503411 1.986447 1.3740%
1902 0.496589 2.013740 2.8128%
1901 0.483003 2.070382 1.4328%
1900 0.476180 2.100047 0.0000%
1899 0.476180 2.100047 16.6611%
1898 0.408174 2.449937 -10.4416%
1897 0.455763 2.194125 0.0000%
1896 0.455763 2.194125 -1.4749%
1895 0.462586 2.161763 1.4970%
1894 0.455763 2.194125 -1.4749%
1893 0.462586 2.161763 -5.5612%
1892 0.489826 2.041543 0.0000%
1891 0.489826 2.041543 -1.3619%
1890 0.496589 2.013740 0.0000%
1889 0.496589 2.013740 -2.6744%
1888 0.510234 1.959884 0.0000%
1887 0.510234 1.959884 1.3553%
1886 0.503411 1.986447 1.3740%
1885 0.496589 2.013740 -1.3553%
1884 0.503411 1.986447 -1.3372%
1883 0.510234 1.959884 -5.0576%
1882 0.537414 1.860761 -3.6586%
1881 0.557823 1.792683 2.4963%
1880 0.544237 1.837433 0.0000%
1879 0.544237 1.837433 5.2689%
1878 0.516997 1.934246 -3.7992%
1877 0.537414 1.860761 -5.9492%
1876 0.571409 1.750060 -1.1800%
1875 0.578232 1.729410

YEAR: 1926

Explanation ​

This excerpt is a price/cost index table from Price/Cost Indexes from 1875 to 1989; Estimated to 2010 by Michael Hart, an economic historian and researcher. The table tracks inflation, deflation, and purchasing power in the U.S. (or possibly another economy, though likely U.S.-based given the context) over a 135-year span, using 1927 as the base year (index = 1.000000). Below is a detailed breakdown of the table’s structure, significance, and the economic trends it reveals, focusing primarily on the 1927 base year and surrounding decades (as requested).

1. Structure of the Table ​

The table has four columns:

  1. Year – The reference year (1875–2010).
  2. Price Index (Left Column) – A normalized measure of price levels (1927 = 1.000000).
    • Example: In 1926, the index is 1.000000, meaning prices were identical to 1927. By 2010, the index is 19.532409, meaning prices were ~19.5x higher than in 1927.
  3. Reciprocal/Purchasing Power (Middle Column) – The inverse of the price index (1/price index), representing the value of a 1927 dollar in that year’s terms.
    • Example: In 1946, the purchasing power is 0.757709, meaning $1 in 1927 bought what $0.76 could buy in 1946 (i.e., the dollar lost ~24% of its value).
  4. Inflation Rate (Right Column) – The year-over-year percentage change in prices.
    • Positive = inflation; negative = deflation.
    • Example: 1946 saw 22.79% inflation, while 1932 saw -11.54% deflation.

2. Key Observations from the Text (Focus on 1927 and Surrounding Era) ​

A. The Base Year (1927) ​

  • The index is normalized to 1.000000 in 1927, meaning all other years are compared to this benchmark.
  • 1926–1928 Stability: The index hovers around 1.00, with minimal inflation/deflation (e.g., 1926: -2.0001%, 1928: -0.6823%). This suggests relative price stability in the late 1920s before the Great Depression.

B. The Roaring Twenties (1920s) ​

  • Post-WWI Inflation (1919–1920):
    • 1919: +15.79% (post-war demand surge).
    • 1920: -13.07% (sharp deflation as the economy adjusted).
  • Stability Mid-Decade (1923–1926):
    • Inflation rates near 0%, reflecting the "Roaring Twenties" prosperity (industrial growth, consumerism, and speculative bubbles).
  • 1929 Crash Foreshadowing:
    • By 1928–1929, the index is flat or slightly deflationary, hinting at economic slowdown before the 1929 stock market crash.

C. The Great Depression (1929–1939) ​

  • Severe Deflation (1930–1933):
    • 1930: -2.74%
    • 1931: -8.45%
    • 1932: -11.54% (peak deflation; prices collapsed as demand plummeted).
    • 1933: -2.61% (lowest point; price index at 0.761884, meaning prices were 24% lower than in 1927).
  • New Deal Recovery (1934–1937):
    • 1934: +8.93% (inflation returns as FDR’s policies stimulate the economy).
    • 1937: +3.97%, but followed by a recession in 1938 (-1.53%).
  • Stagnation Late 1930s:
    • Prices remain ~20–25% below 1927 levels until WWII.

D. World War II and Post-War Boom (1940s–1950s) ​

  • Wartime Inflation (1941–1946):
    • 1941–1942: +6% inflation (war production demands).
    • 1946: +22.79% (post-war pent-up demand; price controls lifted).
  • Post-War Stability (1947–1950s):
    • Inflation moderates to 1–3% annually, reflecting economic growth and the Baby Boom.
    • By 1950, the index is 1.625881 (~62% higher than 1927).

E. The Inflationary 1970s–1980s ​

  • Stagflation (1970s):
    • 1974: +9.09%, 1979: +8.87%, 1980: +9.03% (oil shocks, wage-price spirals).
    • By 1980, the index is 5.830002 (~483% higher than 1927).
  • Volcker’s Disinflation (1980s):
    • Early 1980s: Double-digit inflation tamed by Federal Reserve policies (high interest rates).
    • By 1989: +3.87%, down from +9.68% in 1981.

F. Modern Era (1990s–2010) ​

  • The Great Moderation (1990s–2000s):
    • Inflation stabilizes at ~2–4% annually.
    • 2010 index: 19.532409 (~1,853% higher than 1927; $1 in 1927 = ~$19.53 in 2010 purchasing power).
  • 2008 Financial Crisis:
    • 2008–2009: Inflation dips slightly (4% estimated), reflecting economic contraction.

3. Literary/Analytical Devices (Economic Narrative) ​

While this is a quantitative table, it employs narrative techniques to tell an economic story:

  1. Juxtaposition:
    • Contrast between 1920s stability and 1930s deflation highlights the fragility of prosperity.
    • 1970s inflation vs. 1980s disinflation shows policy impacts.
  2. Foreshadowing:
    • Flat inflation in 1928–1929 hints at the impending crash.
    • 1946’s 22.79% inflation foreshadows post-war economic shifts.
  3. Repetition:
    • The 4% estimated inflation in 2000s creates a rhythm of modern stability, contrasting with earlier volatility.
  4. Symbolism:
    • 1927 = 1.000000 symbolizes a "lost golden age" of price stability, especially when compared to later eras.
    • 1932’s -11.54% symbolizes the depth of the Depression’s despair.

4. Themes ​

  1. Economic Cycles:
    • Booms (1920s, 1950s, 1990s) and busts (1930s, 1970s stagflation, 2008) recur, showing capitalism’s inherent instability.
  2. Policy Matters:
    • New Deal (1930s), Volcker’s Fed (1980s), and post-2008 stimulus demonstrate how government intervention shapes inflation.
  3. Purchasing Power Erosion:
    • The reciprocal column starkly shows how money loses value over time (e.g., $1 in 1927 = $0.05 in 2010).
  4. War and Inflation:
    • WWI, WWII, and the Cold War correlate with price surges, linking geopolitics to economics.

5. Significance of the 1927 Base Year ​

  • Why 1927?
    • Likely chosen for pre-Depression stability, offering a clear baseline before the 1929 crash distorted prices.
    • Represents the peak of the Roaring Twenties—a moment of optimism before collapse.
  • Historical Context:
    • 1927 was a year of technological optimism (Charles Lindbergh’s transatlantic flight, talking movies).
    • The Federal Reserve was relatively new (founded 1913), and monetary policy was less aggressive than today.

6. Broader Implications ​

  • Long-Term Trends:
    • Inflation is the norm: Over 135 years, prices always rise (except during depressions/wars).
    • Deflation is rare and destructive (see 1930s).
  • Wealth Redistribution:
    • Inflation hurts savers (fixed incomes) but helps debtors (loans become cheaper to repay).
  • Economic Memory:
    • The table serves as a warning: Prolonged stability (like the 1920s or 2000s) can precede sudden crises.

7. Critical Questions Raised by the Text ​

  • How would this index look if 2020–2023 (post-pandemic inflation) were included?
  • Does the 4% estimated inflation in the 2000s reflect accurate forecasting or optimistic bias?
  • How do asset prices (stocks, housing) compare to this consumer price index?

Conclusion ​

This table is more than numbers—it’s a chronicle of American economic history, capturing prosperity, crisis, and recovery. The 1927 base year anchors the narrative, serving as a benchmark of stability against which all subsequent inflation, deflation, and policy shifts are measured. By tracing the rise and fall of purchasing power, Hart’s data reveals the deep connections between economics, policy, and human experience across generations.

Would you like a deeper dive into a specific decade (e.g., the 1970s oil shocks or the 1930s deflation spiral)?