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Irving Fisher (February 27 1867 Saugerties, New
York — April 29 1947, New York) United
States|American Economics|economist health
campaigner and Eugenics|eugenicist. He was one of
the earliest American Neoclassical
economics|neoclassical economists and, although he
could be called the first celebrity economist, his
reputation today is probably higher than it was in
his lifetime. Several terms are named after him,
including the Fisher equation,  Fisher hypothesis
and Fisher separation theorem.

Irving Fisher’s father was a teacher and
Congregational minister and the son was brought up
to believe he must be a useful member of society.
Irving had mathematical ability and a flair for
inventing things. A week after he was admitted to
Yale University his father died, aged  53. However
Irving carried on and supported his mother and
brother as well as himself, mainly by tutoring. 

Fisher's best subject was mathematics but
economics better matched his social concerns. For
a career and more immediately a doctoral thesis he
decided to combine the two and work on
mathematical economics; he received the first Yale
Ph.D in Economics in 1892. His advisors were the
physicist Willard Gibbs and the economist William
Graham Sumner. When Fisher started he did not
realise that there was already a substantial
literature on mathematical economics but he caught
up with the Europeans and made a contribution the
European masters like Francis Ysidro
Edgeworth|Edgeworth recognised as first rate. He
constructed a wonderful machine of pumps and
levers to complement his Mathematical
Investigations.  Fisher was always concerned to
bring his analysis to life and while his books and
articles on economic topics exhibited unusual (for
the time) mathematical sophistication, he
presented all of his theories in a very lucid
manner.

This research into basic theory did not touch the
great social issues of the day. Monetary economics
did and this became the main focus of Fisher’s
work. In the 1890s the United States was divided
over the question of the monetary standard. Should
the dollar float or be fixed in terms of gold or
silver or  a combination of the two. To opt for
one system was to choose between the West and the
East, farmer and financier, debtor and creditor,
…. Fisher’s Appreciation and interest was an
abstract analysis of the behaviour of interest
rates when the price level is changing. It
emphasised the distinction between real and
monetary rates of interest which is fundamental to
modern analysis of inflation.  However Fisher
believed that investors and savers—people in
general—were afflicted in varying degrees by 
“the money illusion”; they could not see past
the money to the goods the money could buy.  In an
ideal world changes in the price level would have
no effect on production or employment but in the
actual world of money illusion inflation (and
deflation) did serious harm. 

In 1898 Fisher, by now a Yale professor and
happily  married with a second child just two
years old, found he had tuberculosis, the disease
that had killed his father.  After three years in
sanatoria Fisher returned to work with even
greater energy and with a second vocation as a
health campaigner. To the public he became known
for a book on health and hygiene—How to Live.
His advocacy of health causes and promotion of
jogging and avoiding red meat marked him as a
crank and probably weakened his authority as a
serious economist. He was also a convinced
eugenicist.

For more than forty years Fisher elaborated his
vision of the  damaging “dance of the dollar”
and devised schemes to “stabilise” money, i.e.
to stabilise the price level. Statistical analysis
played an important part in making the case that
the price level needed stabilisation. Fisher was
one of the pioneers in using correlation analysis
in economics and in the 1920s he introduced the
technique of distributed lag analysis. One of his
papers, on the statistical relation between
unemployment and price changes was re-printed in
1973 in the Journal of Political Economy, with the
title "I discovered the Phillips curve". price
index|Index numbers  had an important place in his
technique as a monetary economist and his book The
Making of Index Numbers was an influential
contribution.

Fisher was an immensely prolific writer, producing
technical books and journalism addressing the
problems of the First World War, the prosperous
1920s and the depressed 1930s. His  most famous
books, the Purchasing Power of Money (1911)
expounded  the quantity theory of money—his
explanation of what determines the price
level—and his Theory of Interest (1930) summed
up his views on the effect of the price level on
the rate of interest as well as giving an account
of the real forces that is still largely followed
today. 

The great crash of 1929 and the depression of the
1930s undermined Fisher.  He lost the fortune he
had made from his card index invention, the
Rolodex. Fisher famously predicted, a few days
before the Black Thursday|stock market crash of
1929, "Stock prices have reached what looks like a
permanently high plateau."  For months after the
crash he continued to assure investors that a
recovery was soon in coming.  Once the Great
Depression was in full force, he turned around and
warned of the economic dangers of deflation
(economics)|deflation. The price level remained
central to his thinking but his debt-deflation
theory emphasised that when the price level fell
the real burden of debt  increased as people tried
to pay off their debt. The analysis failed to
convince and people looking for new ideas in
macroeconomics looked instead to John Maynard
Keynes|Keynes.

Most of Fisher's energy went into "causes" and
most of his scientific effort went into monetary
economics but he is best remembered today for his
price theory and capital theory, his studies of an
ideal world from which he thought the actual world
deviated with disastrous effect.


== Irving Fisher's writings ==
The bibliography compiled by Fisher's son, 
* Irving Norton Fisher A Bibliography of the
Writings of Irving Fisher (1961) 
lists 2,425 publications. Among the more notable
items are
* Mathematical Investigations in the Theory of
Value and Prices. , 1892
* Appreciation and interest, 1896
* The Nature of Capital and Income, 1906
* The Rate of Interest, 1907
* Introduction to Economic Science, 1910
* The Purchasing Power of Money: Its Determination
and Relation to Credit, Interest, and Crises, 1911
* Elementary Principles of Economics, 1911
* How to Live (with Eugene Lyon Fisk) 1915
* The best form of index number. in American
Statistical Association Quarterly, 1921
* The Making of Index Numbers, 1922
* The Business Cycle Largely a `Dance of the
Dollar'. Journal of the American Statistical
Society 1923.
* A statistical relation between unemployment and
price changes, in International Labour Review,
1926
* A statistical method for measuring 'marginal
utility' and testing the justice of a progressive
income tax. In Economic Essays Contributed in
Honor of John Bates Clark , 1927
* The Theory of Interest, 1930
* Booms and Depressions, 1932
* The debt-deflation theory of great depressions,
in Econometrica, 1933
* 100% Money, 1935


==Discussions==
Irving Norton Fisher, My Father Irving Fisher
(1956).
 
Robert L. Allen, Irving Fisher: A Biography
(1993).

Max Sasuly, Irving Fisher and Social Science,
Econometrica 15 (1947): 255-78.
 
Joseph Schumpeter, Ten Great Economists (1951),
pp. 222-38.

James Tobin, The New Palgrave: A Dictionary of
Economics, vol. 2 (1987), pp. 369-76. 


==External links==
*http://www.econlib.org/library/YPDBooks/Fisher/fs
hPPM.html The Purchasing Power of Money at
the http://www.econlib.org/index.html Library of
Economics and Liberty. 
*http://www.econlib.org/library/YPDBooks/Fisher/fs
hToI.html The Theory of Interest  at the
http://www.econlib.org/index.html Library of
Economics and Liberty. 
*http://www.econlib.org/library/Essays/fshEnc1.htm
l  Dollar Stabilization at the
http://www.econlib.org/index.html Library of
Economics and Liberty. 
*http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll
3/fisher/capital4 "Precedents for Defining
Capital" from
http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3
/index.html Archive for the History of Economic
Thought
*http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll
3/fisher/utility.htm "Is "Utility" the Most
Suitable Term for the Concept It is Used to
Denote?" from
http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3
/index.html Archive for the History of Economic
Thought


*http://cepa.newschool.edu/het/profiles/fisher.htm
New School Profile: Irving Fisher, 1867-1947
*http://cepa.newschool.edu/het/essays/capital/fish
erinvest.htm Irving Fisher's Theory of Investment


The New School Profile has a photograph of the
young Fisher. There is a photograph of the older
man at 
*http://www.york.ac.uk/depts/maths/histstat/people
/fisher_i.gif Fisher, Irving on the
http://www.york.ac.uk/depts/maths/histstat/people/
welcome.htm Portraits of Statisticians page.