Economists Evoke the Spirit of Irving Fisher

Irving Fisher (1867-1947) was a Yale University professor, a wealthy inventor (his “Index Visible” anticipated the Rolodex), a health nut, and probably the country’s best known economist in the early 20th century. So when he said publicly—in mid-October 1929—that stocks had reached “a permanently high plateau,” panicky investors calmed down. Within a week the Dow sank more than 10 percent on its way to an 89 percent meltdown. It took 25 years for stock prices to recover. Fisher’s reputation never did.

Now, as the U.S. struggles to rebound from the housing collapse, Fisher is winning more adherents. Stung by his failure to foresee the Crash and what followed, he spent years figuring out what happened. The prime result of his labors was the 1933 paper “The Debt-Deflation Theory of Great Depressions.”