Irving Fisher

Irving Fisher
Fisher in 1927
Born(1867-02-27)February 27, 1867
DiedApril 29, 1947(1947-04-29) (aged 80)
NationalityUnited States
Margaret Hazard
(m. 1893; her death 1940)
FieldMathematical economics
School or
Neoclassical economics
Alma materYale University (PhD) (BA)
Josiah Willard Gibbs
William Graham Sumner
InfluencesWilliam Stanley Jevons, Eugen von Böhm-Bawerk
ContributionsFisher equation
Equation of exchange
Price index
Debt deflation
Phillips curve
Money illusion
Fisher separation theorem
Independent Party of Connecticut

Irving Fisher (February 27, 1867 – April 29, 1947)[1] was an American economist, statistician, inventor, and Progressive social campaigner. He was one of the earliest American neoclassical economists, though his later work on debt deflation has been embraced by the post-Keynesian school.[2] Joseph Schumpeter described him as "the greatest economist the United States has ever produced",[3] an assessment later repeated by James Tobin[4] and Milton Friedman.[5]

Fisher made important contributions to utility theory and general equilibrium.[6][7] He was also a pioneer in the rigorous study of intertemporal choice in markets, which led him to develop a theory of capital and interest rates.[4] His research on the quantity theory of money inaugurated the school of macroeconomic thought known as "monetarism."[8] Fisher was also a pioneer of econometrics, including the development of index numbers. Some concepts named after him include the Fisher equation, the Fisher hypothesis, the international Fisher effect, the Fisher separation theorem and Fisher market.

Fisher was perhaps the first celebrity economist, but his reputation during his lifetime was irreparably harmed by his public statements, just prior to the Wall Street Crash of 1929, claiming that the stock market had reached "a permanently high plateau". His subsequent theory of debt deflation as an explanation of the Great Depression, as well as his advocacy of full-reserve banking and alternative currencies, were largely ignored in favor of the work of John Maynard Keynes.[4] Fisher's reputation has since recovered in neoclassical economics, particularly after his work was rediscovered in the late 1950s,[4][9][10] and more widely due to an increased interest in debt deflation after the late-2000s recession.[11]

Having made numerous contributions to economic theory, he later became the foremost proponent of the full-reserve banking reform until his death. He was one of the authors of A Program for Monetary Reform where the general concepts of 100% reserve system is outlined.[12]


Fisher was born in Saugerties, New York. His father was a teacher and a Congregational minister, who raised his son to believe he must be a useful member of society. Despite being raised in religious family, he later on became an atheist.[13] As a child, he had remarkable mathematical ability and a flair for invention. A week after he was admitted to Yale College his father died, at age 53. Irving then supported his mother, brother, and himself, mainly by tutoring. He graduated first in his class with a B.A degree in 1888, having also been elected as a member of the Skull and Bones society.[14]:14

In 1891, Fisher received the first Ph.D. in economics granted by Yale.[15] His faculty advisors were the theoretical physicist Willard Gibbs and the sociologist William Graham Sumner. As a student, Fisher had shown particular talent and inclination for mathematics, but he found that economics offered greater scope for his ambition and social concerns. His thesis, published by Yale in 1892 as Mathematical Investigations in the Theory of Value and Prices, was a rigorous development of the theory of general equilibrium. When he began writing the thesis, Fisher had not been aware that Léon Walras and his continental European disciples had already covered similar ground. Nonetheless, Fisher's work was a very significant contribution and was immediately recognized and praised as first-rate by such European masters as Francis Edgeworth.

After graduating from Yale, Fisher studied in Berlin and Paris. From 1890 onward, he remained at Yale, first as a tutor, then after 1898 as a professor of political economy, and after 1935 as professor emeritus. He edited the Yale Review from 1896 to 1910 and was active in many learned societies, institutes, and welfare organizations. He was president of the American Economic Association in 1918. The American Mathematical Society selected him as its Gibbs Lecturer for 1929.[16] A leading early proponent of econometrics, in 1930 he founded, with Ragnar Frisch and Charles F. Roos the Econometric Society, of which he was the first president.

Fisher was a prolific writer, producing journalism as well as technical books and articles, and addressing various social issues surrounding the First World War, the prosperous 1920s and the depressed 1930s. He made several practical inventions, the most notable of which was an "index visible filing system" which he patented in 1913[17] and sold to Kardex Rand (later Remington Rand) in 1925. This, and his subsequent stock investments, made him a wealthy man until his personal finances were badly hit by the Crash of 1929.

Fisher was also an active social and health campaigner, as well as an advocate of vegetarianism, prohibition, and eugenics.[18] In 1893, he married Margaret Hazard, a granddaughter of Rhode Island industrialist and social reformer Rowland G. Hazard.[1] He died in New York City in 1947, at the age of 80.[1]