I am trying to get some historical statistics to deal with the claims that the Great Depression saw unprecedented action by central banks. Along the way, Daniel Kuehn pointed me to this intriguing chart of the NBER’s “Index of the General Price Level for the United States”:
The constituents of the graph (and their weights) are explained here. Of course there are all kinds of pitfalls when trying to construct a single series on “the purchasing power of the dollar” going back this far, but the above chart certainly matches my intuition: Government inflated like crazy during wars, after which there would be a big depression to knock prices back down.
Oh, and Scott Sumner, according to this metric at least, there was a big surge in (price) inflation during the 1920s, making the crash later on seem obvious.