Irving Fisher

Acclaimed by Joseph Schumpeter as ‘The greatest economist the United States has ever produced’, this book examines the life and work of American economist and statistician Irving Fisher (1867–1947). Fisher’s reputation suffered for decades after his incorrect predictions for the stock market in October 1929 and the impact of Keynesian macroeconomics, but the importance of his work came to be recognized through the advocacy of many prestigious scholars including Milton Friedman, Hyman Minsky and James Tobin. With pivotal contributions including his Debt-Deflation Theory, Fisher Diagram and Ideal Index Number, his research in neoclassical economics influenced policymaking in his own day as well as during the recent financial crisis. This volume will be of interest to all those interested in the twentieth century transformation of economics.

Perhaps America's first celebrated economist, Irving Fisher-for whom the Fisher equation, the Fisher hypothesis, and the Fisher separation theorem are named-staked an early claim to fame with his revival, in this 1912 book, of the "quantity theory of money." An important work of 20th-century economics, this work explores: the circulation of money against goods the various circulating media the mystery of circulating credit how a rise in prices generates a further rise influence of foreign trade on the quantity of money the problem of monetary reform and much more. American economist IRVING FISHER (1867-1947) was professor of political economy at Yale University. Among his many books are Mathematical Investigations in the Theory of Value and Prices (1892), The Rate of Interest (1907), Why Is the Dollar Shrinking? A Study in the High Cost of Living (1914), and Booms and Depressions (1932).

In economics, money illusion refers to the tendency of people to think of currency in nominal, rather than real, terms. In other words, the numerical/face value (nominal value) of money is mistaken for its purchasing power (real value). This is false, as modern fiat currencies have no inherent value and their real value is derived from their ability to be exchanged for goods and used for payment of taxes. The term was coined by John Maynard Keynes in the early twentieth century. Almost every one is subject to the "Money Illusion" in respect to his own country's currency. This seems to him to be stationary while the money of other countries seems to change. It may seem strange but it is true that we see the rise or fall of foreign money better than we see that of our own.-IRVING FISHER

Irving Fisher was one of the greatest and certainly one of the most colorful American economists. Widely acknowledged as the chief architect of modern neo-classical economics, he was a writer and teacher of prodigious scope and output whose business career included the earning of a fortune from the invention of a card index system, and its subsequent loss in the Great Crash. He was also an active campaigner for numerous causes, including world peace, prohibition, and 100 percent deposit reserve money. This biography, focusing both on Fisher's personal life, as well as on his intellectual contributions, will be of wide interest to economists and of particular interest to American economics scholars who regard him as their pre-1950 giant of the discipline.

Excerpt from The Rate of Interest, Its Nature, Determination and Relation to Economic Phenomena The problem of interest has engaged the attention of writers for two thousand years, and of economists since economics began. And yet, with the exception of what has been accomplished by Rae, Bohm-Bawerk, Landry, and some others, very little progress has been made toward a satisfactory solution. Even these writers can scarcely claim to have established a definitive theory of interest. While the value of their work is great, it is chiefly negative. They have cleared the way to a true theory by removing the confusions and fallacies which have beset the subject, and have pointed out that the rate of interest is not a phenomenon restricted to money markets, but is omnipresent in economic relations. The theory of interest here presented is largely based upon the theories of the three writers above mentioned, and may therefore be called, in deference to Bohm-Bawerk, an "agio theory." But it differs from former versions of that theory by the introduction explicitly of an income concept. This concept, which I have developed at length in The Nature of Capital and Income, is found to play a central role in the theory of interest. The difficult problem is not whether the rate of interest is an agio, or premium, for of this there can be no question, but upon what does that agio depend and in what manner? Does it depend, for instance, on the volume of money, the amount of capital, the productivity of capital, the "superior productivity of roundabout processes," the labor of the capitalist, the helplessness of the laborer, or upon some other condition? About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works."