But he describes very well in both books the excesses that had happened before the crash.Īre you choosing these books partly because they mirror the excesses involved in the 2008 financial crisis? It’s only in 1932 that he realised that there had been a debt overhang. When he wrote that book, the stock market was recovering and he explained that basically the valuations were very low and that the outlook was still favourable. At that stage he hadn’t realised it fully. In 1930, before the Depression -but just after the crash of 1929 had happened- he wrote The Stock Market Crash And Afterwards. “I would rank Irving Fisher along with Schumpeter as one of the great economists.” He didn’t realise this while it was happening, but at least afterwards he realised it. He was to a large extent a monetarist, but he realised that expected money supply growth and debt growth would lead to problems. I would rank him along with Schumpeter as one of the great economists. He wasn’t a stock market timer, but more among the best economists of the 20th century. But because he was such a well-known economist, I think, Princeton bailed him out.įisher developed this debt-deflation theory. But during the crash he suffered badly: he had mortgages on his house and so he had a financial problem. He was very optimistic about America and about the economy, and so he had long positions in equities. At that time I think he was a Professor at Princeton. It was written after the Depression, in 1932, and the author, Irving Fisher himself, essentially went bust. I think it’s a historical document, so I list it as one of my favourite books. This is a very good account of how the Boom occurred and how the Great Depression followed. Your first book is Booms and Depressions by Irving Fisher. Foreign Policy & International Relations.
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