Garett Jones of George Mason University talks with EconTalk host Russ Roberts about the ideas of Irving Fisher on debt and deflation. In a book, Booms and Depressions and in a 1933 Econometrica article, Fisher argued that debt-fueled investment booms lead to liquidation of assets at unexpectedly low prices followed by a contraction in the money supply which leads to deflation and a contraction in the real side of the economy--a recession or a depression. Jones then discusses the relevance of Fisher's theory for the current state of the economy in the aftermath of the financial crisis.
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CATEGORIES: Biography, Intellectual History (22) , Business Cycles, Recessions, and the Great Depression (63) , Finance (71) , Financial Crisis of 2008 (70) , Garett Jones (3) , Government Budgets and Taxation (44) , Money, Banking, Monetary Policy (68)
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