The theory of interest: as determined by impatience to spend income and opportunity to invest it

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A.M. Kelley, 1930 - Business & Economics - 566 pages
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About the author (1930)

Irving Fisher was an American economist best noted for his work in the fields of statistics, monetary theory, interest, and capital. He spent most of his life at Yale University, first as a student and later as a member of the faculty. A prolific writer, he produced nearly 30 books and hundreds of scientific papers. He was also a reformer-prohibitionist, pacifist, and nutritionist-by way of his best-selling book, How to Live (1915). Fisher's business ventures included a profitable system of card-index filing, which he designed and sold. He was, however, less successful as a forecaster. One week before the infamous stock market crash of 1929, he proclaimed that the U.S. economy was on a "permanently high plateau." During the ensuing crash, he lost most of the fortune he had earned on his filing system. One of Fisher's lasting contributions was his classic Making of Index Numbers (1927), which attempted to develop a theory that would be statistically operative. Another was his theory of a "real" rate of interest. His Rate of Interest (1907), and its extensive revision, which appeared as The Theory of Interest (1930), offered an explanation of capitalism that made the rate of interest dependent on productivity, time preference, risk, and uncertainty. In his writing Fisher was able to satisfy the requirements of both the specialist and the general reader without banishing mathematics to footnotes or appendices. A final, and perhaps most important, contribution was the quantity theory of money expression, which is used to link changes in the quantity of money to changes in the price level. Much of Fisher's work was truly pioneering. His concern with a stable price level was based as much on a sense of fairness to debtors and creditors as it was on a desire to avoid the "dance of the dollar"-otherwise known as the business cycle.

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