Quote from: patvarilly on July 19, 2011, 05:36:59 AM

Quote from: hugolp on July 19, 2011, 05:27:48 AM

Also, you have data of price deflationary periods in history when investment and consumption went up.

That's a genuinely interesting point. The only one I have heard of is 1870s US, but I don't know enough about what was going on at the time to make up my mind whether deflation contributed to these things, or whether these things happened despite the deflationary environment (don't take this as a statement either way, I genuinely don't know). Out of context, I can't make up my mind (e.g., there are inflationary periods where investment and consumption have gone down, despite the pull of inflation in the opposite direction). Can you point me in the right direction to learn about these episodes?

Canada during the XIX century was that way (and btw, they had no central bank and no banking panics). There are other numerous examples.

For raw data about the USA XIX century one of the best sources is the book Milton Friedman and Anna Swartz, although the book has very flawed conclussions due to their lack of valid economic theory. Rothbard's History of Money and Banking in the USA from the... is good to understand what happened.

Then you can read Lawrence White about Scotland during the XVII century or George Selgin about Canada.