A Tract on Monetary Reform (1923) and the Gold Standard
British prices just after the war were more volatile than ever before or since. The monthly cost of living index (1913 average = 100) rose from 242 in August 1919 to 319 the following March and then fell to 158 by February 1922 (A Tract on Monetary Reform, hereafter TMF, Keynes 1923 [1971]: 84). Wholesale prices followed a similar pattern. These huge fluctuations in the price level, deflation as well as inflation, had a destabilizing effect on production and employment: unemployment rose to 14 per cent in 1922 and, as other problems arose, never fell below 10 per cent for the entire interwar period - more on that persistent imbalance below. In TMR, based on previously published newspaper articles, Keynes attempted to explain these dramatic short-term price fluctuations.