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Consumer prices and wages in Germany, 1500 - 1850

Author

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  • Ulrich Pfister

Abstract

The paper develops a consumer price index and two real wages series for Germany c. 1500–1850. Consumer price indices (CPI) based on eleven goods can be developed for ten towns; one of the two real wage series includes another six towns. Since German bullion markets were little integrated far into the early modern period it is difficult to establish a reliable national CPI. Preference should therefore be given to wage series that can be deflated by local CPIs. The analysis of the aggregate real wage series produces the following insights: First, there was a strong negative feedback between population and the real wage until the middle of the seventeenth century. While the Thirty Years War benefited the material welfare of the survivors through a huge decline in population size, the real wage was probably lower than extrapolated on the basis of the labour productivity schedule, suggesting a net loss in welfare. Second, the relationship between the real wage and population size was much weaker in the eighteenth than in the sixteenth century, which points to a continuous growth of labour productivity. Third, already between the 1810s and 1820s the Malthusian relationship between the real wage and population size prevailing in the eighteenth century was broken. The reasons for this structural rupture remain obscure and require further study.

Suggested Citation

  • Ulrich Pfister, 2010. "Consumer prices and wages in Germany, 1500 - 1850," CQE Working Papers 1510, Center for Quantitative Economics (CQE), University of Muenster.
  • Handle: RePEc:cqe:wpaper:1510
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    File URL: https://www.wiwi.uni-muenster.de/cqe/sites/cqe/files/CQE_Paper/CQE_WP_15_2010.pdf
    File Function: Version of September, 2010
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    Citations

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    Cited by:

    1. Uebele, Martin & Pfister, Ulrich & Riedel, Jana, 2012. "Real wages and the origins of modern economic growth in Germany, 16th to 19th centuries," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62076, Verein für Socialpolitik / German Economic Association.
    2. Chris Hudson, 2016. "Witch Trials: Discontent in Early Modern Europe," IHEID Working Papers 11-2016, Economics Section, The Graduate Institute of International Studies.
    3. Ulrich Pfister & Georg Fertig, 2010. "The population history of Germany: research strategy and preliminary results," MPIDR Working Papers WP-2010-035, Max Planck Institute for Demographic Research, Rostock, Germany.
    4. Michael Kopsidis & Ulrich Pfister, 2013. "Agricultural development during early industrialization in a low-wage economy: Saxony, c. 1790-1830," Working Papers 0039, European Historical Economics Society (EHES).
    5. Ulrich Pfister & Michael Kopsidis, 2015. "Institutions versus demand: determinants of agricultural development in Saxony, 1660–1850," European Review of Economic History, Oxford University Press, vol. 19(3), pages 275-293.

    More about this item

    Keywords

    Consumer Prices; Germany; 1500;

    JEL classification:

    • A - General Economics and Teaching

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