Irving Fisher, the Debt-Deflation Theory, and the Crisis of 2008-2009

Authors

Zacharie Quiviger, McGill UniversityFollow

Abstract

Irving Fisher’s 1932 Booms and Depressions presents a fully specified, nine-pronged model of financial crises that has been widely forgotten by modern macroeconomists. This article builds on the renewed interest in Fisher’s Debt-Deflation Theory to explore its pertinence to the Great Recession. By parsing through macroeconomic data from the 2000s, it finds evidence of debt-deflation spiraling and of the nine Fisherian “main factors” co-varying as the author had predicted during the 2008-2009 financial crisis. The article concludes in assessing the uses of Fisher’s work in current macroeconomics and in arguing for a greater consideration of its insights.

Recommended Citation

Quiviger, Zacharie (2019) "Irving Fisher, the Debt-Deflation Theory, and the Crisis of 2008-2009," Undergraduate Economic Review: Vol. 16: Iss. 1, Article 22.
Available at: https://digitalcommons.iwu.edu/uer/vol16/iss1/22