Irving Fisher (eBook)

Robert Dimand is Professor of Economics at Brock University, Canada. In 2012-2013 he was President of the History of Economics Society. His first book, The Origins of the Keynesian Revolution (1988), was based on his Yale PhD dissertation, supervised by James Tobin. Since then he has authored and edited a dozen books, and more than 100 refereed journal articles. He previously published another book in this series entitled James Tobin (2014).

Forthcoming Titles 7
Acknowledgements 10
Contents 12
1 Economic Scientist, Economic and Social Reformer 14
Introduction 14
Overview of the Book 20
Conclusion: A Great Economist 25
References 26
2 Indifference Curves and a Hydraulic Model of General Equilibrium 29
Introduction: Fisher’s General Equilibrium 29
Writing the Dissertation 32
Indifference Curves: The Elusive Measurability of Utility 35
The Influence of Gibbs 39
Fisher’s Hydraulic Machine 40
Influence, Neglect, and Rediscovery 42
Conclusion 49
References 50
3 Revitalizing the Quantity Theory of Money: From the Fisher Relation to the Fisher Equation 57
Introduction 57
Fisher and the Quantity Theory of Money 59
The Context of Appreciation and Interest and of The Purchasing Power of Money 61
Appreciation and Interest 65
Fisher and the Equation of Exchange 69
Fisher and the Velocity of Circulation 73
The Dance of the Dollar—And Its Remedy 75
Fisher’s Contribution to Monetary Economics 79
References 81
4 The Fisher Diagram and the Neoclassical Theory of Interest and Capital 86
Introduction: Impatience and Opportunity to Invest 86
The Fisher Diagram 89
The Fisher Equation 92
Sources: Rae, Turgot, Böhm-Bawerk, and Landry 96
Institutionalist Critics: Commons and Veblen 110
Keynes’s Marginal Efficiency of Capital and Fisher’s Rate of Return Over Cost 115
Conclusion 116
References 118
5 Taming the “Dance of the Dollar”: From the Compensated Dollar to 100% Money 124
Rejecting the “So-Called Business Cycle” 124
The Dance of the Dollar 129
A Remedy for the Dance of the Dollar: Fisher’s Compensated Dollar Plan 131
A New Remedy for the Dance of the Dollar: Fisher and 100% Money 137
References 141
6 Fighting Money Illusion: The Fisher Ideal Index Number 146
Introduction 146
Toward an “Ideal Index” 150
Reception, Criticism, and Response 156
Conclusion 161
References 164
7 Hubris, Nemesis, and Analysis: “Stock Prices Appear to Have Reached a Permanently High Plateau” 168
A Black Mark of Infamy 168
Fisher’s Contributions to Understanding Financial Markets 169
Stocks Versus Bonds 170
Falling off a Permanently High Plateau 175
Fisher’s Statisticians: Karsten and Sasuly 177
Alfred Cowles 179
Conclusion 180
References 180
8 The Debt-Deflation Theory of Great Depressions 185
Fisher’s Audience 187
Diagnosis of the Depression 190
The Experience of the 1920s and 1930s 195
A Fisher Model of Deflation and Depression 198
Bernanke and King Read Fisher (1933) and Study the Debt-Deflation of the 1930s 201
Fisher’s Debt-Deflation Theory and the Literature 204
References 206
9 Changing Economics: Irving Fisher, the Cowles Commission, and the Econometric Society 211
Introduction 211
Fisher Encounters Mathematical Economics 212
Some Mainstream Reactions to Fisher’s Mathematical Economics 215
Fisher and the Origins of the Econometric Society 217
Fisher and Cowles 222
Conclusion 226
References 228
10 Fisher’s Legacy in Economics 232
Introduction: Fall and Rise 232
Return from Obscurity 234
Pillars and Arches of an Unbuilt Temple 236
Institutional Influence and Isolation 238
Intellectual Roots 239
References 240
Index 244