THE DEBT-DEFLATION THEORY OF GREAT DEPRESSIONS

THE DEBT-DEFLATION THEORY OF GREAT DEPRESSIONS
BY IRVING FISHER

LC-USZ62-101512 (b&w film copy neg.) No known restrictions on publication.

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INTRODUCTORY
In Booms and Depressions, I have developed, theoretically and statistically, what may be called a debt-deflation theory of great depressions.
In the preface, I stated that the results „seem largely new,“ I spoke thus cautiously because of my unfamiliarity with the vast literature on the subject. Since the book was published its special conclusions have been widely accepted and, so far as I know, no one has yet found them anticipated by previous writers, though several, including myself, have zealously sought to find such anticipations.

Two of the best-read authorities in this field assure me that those conclusions are, in the words of one of them, „both new and important.“
Partly to specify what some of these special conclusions are which are believed to be new and partly to fit them into the conclusions of other students in this field, I am offering this paper as embodying, in brief, my present „creed“ on the whole subject of so-called „cycle theory.“

My „creed“ consists of 49 „articles“ some of which are old and some new. I say „creed“ because, for brevity, it is purposely expressed dogmatically and without proof. But it is not a creed in the sense that my faith in it does not rest on evidence and that I am not ready to modify it on presentation of new evidence. On the contrary, it is quite tentative. It may serve as a challenge to others and as raw material to help them work out a better product.
Meanwhile the following is a list of my 49 tentative conclusions.
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PDF – [22 Seiten]

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[ABOUT THE AUTHOR
Irving Fisher was one of America’s greatest mathematical economists and one of the clearest economics writers of all time. He had the intellect to use mathematics in virtually all his theories and the good sense to introduce it only after he had clearly explained the central principles in words.
Although he damaged his reputation by insisting throughout the Great Depression that recovery was imminent, contemporary economic models of interest and capital are based on Fisherian principles. Similarly, monetarism is founded on Fisher’s principles of money and prices.]

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Anmerkung

Gerade im Zusammenhang mit den aktuellen Entwicklungen der Finanzkrise erscheint mir dieser fulminante Aufsatz des legendären Irving Fisher sehr empfehlenswert.

Ihr Oeconomicus

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