Irving Fisher

Irvingfisher

Irving Fisher (February 27, 1867 – April 29, 1947) was an American economist, statistician, inventor, and Progressive social campaigner. He was one of the earliest American neoclassical economists, though his later work on debt deflation has been embraced by the Post-Keynesian school. Fisher made important contributions to utility theory and general equilibrium. He was also a pioneer in the rigorous study of the relationship between inflation and interest rates, articulated in what is now known as the Fisher equation. Throughout his life, Fisher campaigned for various social reforms, including prohibition, eugenics, and public health.

Early Life and Education

Irving Fisher was born in Saugerties, New York, in 1867. He graduated first in his class with a B.A. degree in 1888 from Yale University, where he later earned a Ph.D. in economics and mathematics in 1891. His doctoral dissertation, "Mathematical Investigations in the Theory of Value and Prices," is considered a significant early contribution to neoclassical economics.

Career and Contributions

Fisher's work covered many areas of economics, including monetary theory, capital theory, investment theory, and health economics. His most enduring intellectual work is perhaps the Fisher equation, which describes the relationship between nominal interest rates, real interest rates, and inflation. This equation plays a fundamental role in monetary economics.

He also developed the theory of interest rates, the quantity theory of money, and made substantial contributions to the development of index numbers for inflation measurement. Fisher was a proponent of the full-reserve banking reform, which aimed to separate the monetary and credit functions of the banking system to reduce economic crises.

In the 1930s, Fisher's work on debt deflation was groundbreaking. He argued that during deflation, the real value of debt increases, leading to a reduction in consumption and investment, and thus, to economic depressions. This work was largely ignored during his lifetime but has gained recognition and influence in post-Keynesian economics and in the analysis of financial crises.

Personal Life and Legacy

Fisher was deeply involved in various social causes, advocating for health, prohibition, and eugenics. His personal life was marked by tragedy during the 1929 stock market crash, where he lost his fortune and credibility due to his optimistic market predictions prior to the crash.

Despite these setbacks, Fisher's contributions to economics have been influential. The Fisher hypothesis, which suggests that real interest rates are stable in the long run, regardless of inflation, has been a subject of much debate and research in economics.

Fisher died in New York City in 1947. Today, he is remembered as one of the great American economists, with his work continuing to influence economic theory and policy.

See Also

• Monetary economics
• Neoclassical economics
• Post-Keynesian economics
• Debt deflation