Has inflation always had the upper hand in economic history, or have there been long periods of deflation or long periods of price stability in which prices rose and fell, but, on average and over the long haul, did not change from one generation to the next? The recent deflationary experience of Japan comes to mind, but that's a brief span of time, a mere 20-30 years. What I'm thinking of is something much more substantial, say a century or two, or maybe even longer, and periods of time beyond the reaches and manipulations of Federal central bankers. "The Great Wave: Price Revolutions and the Rhythm of History," by David Hacket Fisher, looks at prices and inflation back to medieval times. I have only browsed the book, but it is on my list of books to read. He claims there have been four great waves of inflation, interspersed with periods of price stability, in the 13th, 16th, 18th, and the 20th century. The waves last 100 or more years. From an online review, http://www.fiu.edu/~hisgsa/BR-Gilberto.htmThey began at the end of periods of high prosperity when people did not recognize them as long term trends. After a few decades, prices rose beyond past price fluctuations. When people recognized these changes, they adjusted their behavior by rising rents and increasing interest rates. These adjustments caused prices to raise to higher levels. Next came a period of instability and price volatility. Commodity markets and financial markets experienced price shocks. Government spending exceeded revenue. Real wages fell, but interest rates rose; the poor became poorer and the richer became richer. During the last stages of each price revolution, a period of crisis set in with shattering force.Once a price wave crested and the crisis stage ended, a period of deflation set in, and prices eventually settled fluctuating along a stable plane. ... Fischer identifies four periods of price equilibrium: the equilibrium of the twelfth century, (which coincided with the climax of Medieval civilization), the equilibrium of the Renaissance (1400 to 1480), the equilibrium of the Enlightenment (1660 to 1730), and the Victorian equilibrium (and as the label suggests, it coincided with the life of Queen Victoria).
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