By Mike Kimel
The Gold Index, April 1933 – February 1934, Courtesy of Scott Sumner
I’ve been having a bit of a back and forth with Scott Sumner of The Money Illusion over the degree to which monetary policy, in particular the devaluation of the dollar, affected the economy in 1933. (My most recent post on the issue is here.)
In private correspondence, Sumner provided me with the draft for three chapters of a manuscript he is working on. I can safely say that whether or not I agree with his findings, Sumner has done his homework – the draft is meticulously researched and abounds with details corroborating his findings. Of particular interest to me was a Table 8.2, which shows weekly figures for a number of series from April 15, 1933 to the first week of February, 1934. Sumner has graciously agreed to let me post that table. I don’t want to freeride on his efforts to much, so I’m only reproducing the first few columns.
I believe the most interesting thing in the table is – what has been the cause of some discussion between the two of us – is the Gold Index. From the footnote to the table in the manuscript:
The gold index is the Annualist Index of Commodity Prices measured in gold terms.
Sumner collected that data manually from old trade journals. I haven’t been able to find that data online. What the data shows, to quote Sumner, is that “an ounce of gold could buy more internationally traded goods in 1934 than 1933. That’s what the 815 to 650 is showing—falling prices in gold terms.”
Here’s a graph of the series:
Addendum by Ken: Here’s the Gold Index data listed above with the Vertical Axis rescaled: