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Monday, February 6, 2012

Don't Know Much About History . . .

Yeah, volatility is usually considered a "bad thing" in economics.  It's basically the chance that the dollar you leave in your wallet tonight will be worth $0.50 or $1.50 when you wake up in the morning.  Makes decision making difficult.  Like living on a roulette table.






* Conversion of the U.S. dollar to silver and gold was suspended during the Civil War and discontinued entirely by 1972.  Covers the years for which full data are available (i.e., 1820 through 2009).

This analysis excludes, for what I hope are obvious reasons, the years covering America's wars of existential crisis, i.e., the Civil War, World War I, World War II, when military spending as a % of GDP reached anamolous heights, ranging from over 3% and up to nearly 37% in 1942.  See details of calculations and source citations at the linked workbook.

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