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Download as PDF; Printable version; ... Irving Fisher (February 27 ... and in light of the ensuing Great Depression, Fisher developed a theory of economic crises ...
The theory was developed by Irving Fisher following the Wall Street crash of 1929 and the ensuing Great Depression. The debt deflation theory was familiar to John Maynard Keynes prior to Fisher's discussion of it, but he found it lacking in comparison to what would become his theory of liquidity preference. [1]
A tent city in Sacramento, California was described as "images, hauntingly reminiscent of the iconic photos of the 1930s and the Great Depression" and "evocative Depression-era images." [18] According to economist Irving Fisher, the two dominant factors in a depression are over-indebtness to start with and deflation soon after. [19]
Irving Fisher argued that the predominant factor leading to the Great Depression was a vicious circle of deflation and growing over-indebtedness. [100] He outlined nine factors interacting with one another under conditions of debt and deflation to create the mechanics of boom to bust.
Irving Fisher's "The Debt-Deflation Theory of Great Depressions" (1933) [20] analyzed how debt cycles contributed to economic instability. [21] Fisher proposed in his 1935 "100% Money" [22] disconnecting money and credit. [23] Albert G. Hart detailed in 1935 [24] how to maintain economic stability during the transition to 100% reserves. [25]
The Chicago Plan was a comprehensive plan to reform the monetary and banking systems in the United States introduced by University of Chicago economists in 1933. The Great Depression had been caused in part by excessive private bank lending, so the plan proposed to eliminate private bank money creation through fractional reserve lending.
For example, economist Richard Koo wrote that Japan's "Great Recession" that began in 1990 was a "balance sheet recession". It was triggered by a collapse in land and stock prices, which caused Japanese firms to have negative equity, meaning their assets were worth less than their liabilities. Despite zero interest rates and expansion of the ...
The free and dutiable rate in 1929 was 13.5% and peaked under Smoot–Hawley in 1933 at 19.8%, one-third below the average 29.7% "free and dutiable rate" in the United States from 1821 to 1900. [22] The average tariff rate, which was applied on dutiable imports, [ 23 ] [ 24 ] increased from 40.1% in 1929 to 59.1% in 1932 (+19%).