Consumer prices and wages in Germany, 1500 - 1850

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.