The debtdeflation theory of great depressions springerlink. Debt deflation theory of depressions, on which he had lectured at yale in 193 1. The debtdeflation theory of great depressions title fraser. Fishers debt depression theory of great depressions econometrica 1. During the depths of the great depression in the united states, fisher 1933 put forward what he called the debtdeflation theory of great depressions.
The debtdeflation theory of great depressions fraser. Irving fishers debtdeflation theory of great depressions taylor. Pdf the debt deflation theory of great depressions. Bank assets fall because of the defaults and because the value of their collateral falls, leading to a surge in bank insolvencies, a reduction in lending and by extension, a reduction in spending. The debtdeflation theory of great depressions the big picture. Irving fishers debtdeflation theory of great depressions. The eminent yale monetary and capital theorist irving. Following the stock market crash of 1929 and the ensuing great depression, 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. Fishers theory raised too many uncomfortable questions about the roles played by the federal reserve, wall street and washington in propagating the. Fisher introduced the debtdeflation theory of depression for explaining the great. The debt deflation theory of great depressions the debt deflation theory of great depressions. The debtdeflation theory of great depressions title. Debt deflation is a theory that recessions and depressions are due to the overall level of debt rising in real value because of deflation, causing people to default on their consumer loans and mortgages.
The debtdeflation theory of great depressions by irving fisher. In booms and depressions, i have developed, theoretically and sta tistically, what may be called a debtdeflation theory of great depres sions. In the preface, i stated that the results seem largely new, i spoke thus cautiously because of my unfamiliarity with the vast. 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. According to the debt deflation theory, a sequence of effects of the debt bubble bursting occurs. Fishers debtdeflation theory of great depressions and a. His debt deflation theory of great depressions 1933 was powerful and resonant, although largely neglected by officialdom, wall street and academia alike. The debt deflation theory of great depressions by irving fisher introductory in booms and depressions, i have developed, theoretically and statistically, what may be called a debt deflation theory of great depressions.
1266 836 677 813 427 1109 987 635 598 1371 785 444 1068 292 774 533 726 210 1354 64 1069 1543 1058 175 64 493 1182 1517 633 266 1037 1282 17 997 1294 419 1245 976