Thursday, March 5, 2009

One of My Favorite Economists: Irving Fisher

While not the household name that either Milton Friedman or John Maynard Keynes has become, Irving Fisher is one of my all-time favorite economists. And if you ever took a course in macroeconomics that studied the quantity theory of money or its basis, the equation of exchange, you were studying Irving Fisher.

Well, the Economist has published a wonderful piece about Fisher, in light of recent economic conditions:
"As parallels to the 1930s multiply, Fisher is relevant again. As it was then, the United States is now awash in debt. No matter that it is mostly “inside” or “internal” debt—owed by Americans to other Americans. As the underlying collateral declines in value and incomes shrink, the real burden of debt rises. Debts go bad, weakening banks, forcing asset sales and driving prices down further. Fisher showed how such a spiral could turn mere busts into depressions."
Yes, Irving Fisher was quite an economist. He even discovered the Phillips curve before Phillips did:

I. Fisher - I Discovered the Phillips Curve

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