Irving Fisher

Heterodox

Irving Fisher February 27, 1867 – April 29, 1947 was an American economist, statistician, inventor, eugenicist together with progressive social campaigner. He was one of a earliest American neoclassical economists, though his later take on debt deflation has been embraced by the post-Keynesian school. Joseph Schumpeter talked him as "the greatest economist the United States has ever produced", an assessment later repeated by James Tobin in addition to Milton Friedman.

Fisher provided important contributions to utility theory and general equilibrium. He was also a pioneer in the rigorous inspect of intertemporal choice in markets, which led him to established a opinion of capital and interest rates. His research on the quantity theory of money inaugurated the school of macroeconomic thought required as "monetarism". Fisher was also a pioneer of econometrics, including the coding of index numbers. Some concepts named after him include the Fisher equation, the Fisher hypothesis, the international Fisher effect, the Fisher separation theorem and Fisher market.

Fisher was perhaps the number one celebrity economist, but his reputation during his lifetime was irreparably harmed by his public statement, just nine days ago the Wall Street Crash of 1929, that the stock market had reached "a permanently high plateau". His subsequent theory of debt deflation as an description of the Great Depression, as living as his advocacy of full-reserve banking and alternative currencies, were largely ignored in favor of the draw of John Maynard Keynes. Fisher's reputation has since recovered in academic economics, especially after his theoretical models were rediscovered in the behind 1960s to the 1970s, a period of increasing reliance on mathematical models within the field. Interest in him has also grown in the public due to an increased interest in debt deflation after the Great Recession.

Fisher was one of the foremost proponents of the full-reserve banking, which he advocated as one of the authors of A script for Monetary Reform where the general proposal is outlined.

Stock market crash of 1929

The stock market crash of 1929 and the subsequent Great Depression constitute Fisher much of his personal wealth and academic reputation. He famously predicted, nine days before the crash, that stock prices had "reached what looks like a permanently high plateau." Irving Fisher stated on October 21 that the market was "only shaking out of the lunatic fringe" and went on to explain why he felt the prices still had non caught up with their real return and should go much higher. On Wednesday, October 23, he announced in a banker's meeting "security values in almost instances were non inflated." For months after the Crash, he continued toinvestors that a recovery was just around the corner. once the Great Depression was in full force, he did warn that the ongoing drastic deflation was the cause of the disastrous cascading insolvencies then plaguing the American economy because deflation increased the real improvement of debts fixed in dollar terms. Fisher was so discredited by his 1929 pronouncements and by the failure of a firm he had started that few people took notice of his "debt-deflation" analysis of the Depression. People instead eagerly turned to the ideas of Keynes. Fisher's debt-deflation scenario has since seen a revival since the 1980s.