The Great Wave

Fischer, a historian, assembles price series across eight centuries of European and American history and argues that they show a recurring pattern of four great waves: the medieval price revolution of the thirteenth century, the sixteenth-century price revolution, the eighteenth-century revolution, and the twentieth-century one.

Each wave, in his account, follows the same sequence. A long period of price stability and prosperity is followed by rising prices, initially driven by population growth pressing on resources. The inflation accelerates, real wages fall, returns to land and capital rise relative to labour, inequality widens, social unrest increases, and governments debase currency or expand money supply in response. The wave ends in a crisis of some kind, followed by a long period of price equilibrium and rising real wages. He documents the sequence for each wave with wage, price, rent and demographic series.

The argument connects economic and social history in a way most price histories do not, and Fischer draws explicit consequences: inequality tracks the wave, family formation and crime rates move with it, and political instability follows real wage decline. The book is long and the data appendix is substantial.

Economic historians have criticised it heavily. The waves are identified partly by inspection rather than by formal test, the causal mechanism shifts between demographic and monetary explanations depending on the period, and the twentieth-century wave is fitted to a pattern the earlier ones may not share. Fischer's forecast of a crisis at the end of the twentieth century did not occur as described. Read it for the assembled data and the pattern hypothesis, not as established history.