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<B> Irving Fisher's Publisher - Martino Fine Books</B> |Irving Fisher's Publisher - Martino Fine Books^Invest%[1867-1947], Irving Fisher was one of America’s most celebrated economists. Although not widely remembered outside of economics, within it he has increasingly become considered a giant of the profession. Quote from the blurb of the 2011 reprinted edition of his 1933 book about the cause of the Great Depression which started in 1929.@Following the stock market crash of 1929 and the ensuing Great Depression, Irving Fisher developed a theory of economic crises called 'debt-deflation', which rejected general equilibrium theory and attributed crises to the bursting of a credit bubble. According to the debt deflation theory, a sequence of effects of the debt bubble bursting occurs: 1. Debt liquidation and distress selling. 2. Contraction of the money supply as bank loans are paid off. 3. A fall in the level of asset prices. 4. A still greater fall in the net worth of businesses, precipitating bankruptcies. 5. A fall in profits. 6. A reduction in output, in trade and in employment. 7. Pessimism and loss of confidence. 8. Hoarding of money. 9. A fall in nominal interest rates and a rise in deflation adjusted interest rates. This theory was ignored in favor of Keynesian economics, partly due to the damage to Fisher's reputation from his overly optimistic attitude prior to the crash, but has experienced a revival of mainstream interest since the 1980s, particularly since the Late-2000s recession, and is now a main theory with which he is popularly associated. [The book was reviewed at Amazon.com by Gaetan Lion, who was one of their Top 500 Reviewers in the following way: 'Irving Fisher's Debt-Deflation Theory was so prescient vs what occurred 75 years later. This short book written in 1933 is more insightful about the cause of the recent financial crisis than the majority of the current books written after it. The main points of his theory are that the drivers of depressions and financial crisis are over-indebtedness and ensuing deflation as borrowers eventually default and creditors have to resell their collateral at liquidation prices. Fisher also argued that at any point in time at least one economic activity (production, consumption, savings, investments) is in a state of disequilibrium. Economies are nearly always over- or under- doing something (whether it is investing in a specific sector, or producing in another, or whether it is overall consumer demand or savings, etc...). And, eventually one of those market driven disturbances is related to over-indebtedness followed by deflation resulting in another cycle of bubble and crash. This is a vicious cycle because during deflation collateral (asset) prices go down; meanwhile debt outstanding does not. This leads to borrowers defaults and creditors capital write downs. It also leads to contracting credit, income, earnings, demand, GDP, and employment. Fisher's disequilibrium is a foundational concept for John Maynard Keynes The General Theory of Employment, Interest, and Money (Great Minds Series) published in 1936. Keynes expressed that a market economy is typically in a chronic state of disequilibrium. Thus, a market economy needs to be managed through expansive or contracting fiscal policies (generating Budget Deficits during recessions and Budget Surpluses during expansions). Keynes considered Fisher "the great grandparent" of his acclaimed 'The General Theory of Employment, Interest and Money'. For Fisher, over-indebtedness was a main cause of severe contractions. And, he differentiated between the economic disequilibriums with or without over-indebtedness. The ones with over-indebtedness are the ones causing the likes of the Great Depression. The ones without are more benign. We can observe that in modern times. The abrupt stock market crash in October 1987, in the absence of over-indebtedness, hardly left a footprint on the economy. Meanwhile, over-indebtedness proved lethal in our current housing/financial crisis [2008-11]. Hyman Minsky is another famous economist who fully credits Fisher. As stated in his Stabilizing an Unstable Economy Minsky advances that the credit cycle chronically exacerbates the business cycle. Minsky's theory means that while a sector is booming, creditors are only too eager to lend leading to bubbles. While, when the bubble breaks creditors are now too eager to eliminate credit. By doing so, the creditors exacerbate both the up and down swings of the overall economy. Minsky's theory is a direct ramification from Fisher's Debt-Deflation Theory. Also, both economists made the exact same distinction between economic disequilibriums with or without over-indebtedness. Ever since our current housing/financial crisis Minsky has enjoyed a much renewed legacy. Hopefully, the 2010 publication of this short but seminal book will contribute to Fisher becoming fully recognized for his prescience regarding our current financial crisis.]" align=center frameborder=0 hspace=0 vspace=0 scrolling=auto>
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