Money and Prices in the Nineteenth Century: An Old Debate Rejoined

Abstract

In recent work, W. W. Rostow and W. A. Lewis have forcefully argued that real, not monetary, forces explain major periods of inflation and deflation in both the United States and Great Britain from 1797 to 1914. For them, changes in relative growth rates of agricultural and industrial output induce changes in the relative prices of major commodities and in the overall price level. A test of the substitutability of wheat for other primary products, 1870–1914, does not support the Rostow-Lewis theory.