Irving Fisher by https://padlet.com/yan_zhou/lkumopo69d6u by Qiqi & Esther en-us 2019-05-16 02:26:26 UTC 2024-09-27 10:51:48 UTC hello@padlet.com Who is Irving Fisher? yan_zhou https://padlet.com/yan_zhou/lkumopo69d6u/wish/360614995 PERSONAL LIFE
That is me. Born in February 27, 1867, Saugerties, New York, United States and sadly died of tuberculosis on April 29, 1947, New York, New York, United States, but I have been revived to come back to debate and support my economic theories. I was one of the early neoclassical economists of the 19th century. I am regarded as the father of monetary economics. I have made numerous contributions to the development of economics using mathematical and statistical procedures. My father was a teacher and a Congregational minister and raised me to believe that I must be a useful member of the society. I showed remarkable mathematical skills since I was young and was able to get accepted to Yale College. Despite my talent and inclination towards the field of mathematics, I soon learned that economics offered a greater scope for my ambitions and social concerns and decided to become an economist.

INFLUENCE
My experience at Yale college was crucial in shaping my professional trajectory. Among the many professors I met at Yale, my work in mathematical economics had been inspired most by two Yale mentors: Willard Gibbs, a mathematical physicist, and William Graham Sumner, a political economist and pioneering sociologist, who was the most outspoken Social Darwinist. 

]]> 2019-05-16 02:27:06 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/360614995 Photo of Irving Fisher esther_han https://padlet.com/yan_zhou/lkumopo69d6u/wish/360617182 This is a photo of me.]]> 2019-05-16 02:37:25 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/360617182 Major Publications esther_han https://padlet.com/yan_zhou/lkumopo69d6u/wish/360620979 During my lifetime I wrote numerous books and articles about economics. From 1912 to 1935, I produced a total of 331 documents—including speeches, letters to newspapers, articles, reports to governmental bodies, circulars, and books. Nevertheless, some of my most famous publications are:
  • The Nature of Capital and Income (1906)
    • In this book I included fundamental of concepts behind the modern economics: capital and income, which are linked through the rate of interest. This  textbooks explores ideas such as the difference between wealth and property. 
  • The Purchasing Power of Money (1911)
    • This book explores the circulation of money against goods, the mystery of circulating credit, how a rise in prices generates a further rise, influence of foreign trade on the quantity of money, the problem of monetary reform and much more.
  • The Making of Index Numbers (1922)
    • Since the need for quantitative measurement in economics is great, I wrote this book to study the varieties, tests and reliability of index numbers. 
  • The Theory of Interest (1930)
    • This book contains my theory in which the rate of interest is dependent upon all other elements involving productivity, time preference, risk and uncertainty. Moreover it also includes an original explanation of the broader capitalistic process. 
]]> 2019-05-16 02:57:34 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/360620979 Interest Capital yan_zhou https://padlet.com/yan_zhou/lkumopo69d6u/wish/363232202 One of my most famous contribution is the Theory of Interest: The Fisher Effect which is a non-monetary theory.  I thought that the main problem in Economics was the determination of the rate of interest. In the process of developing my theory, I considered three factors: impatience or preference of present goods, productivity and uncertainty and risk. Impatience and productivity determined the rate of interest. My concept of productivity is actually quite similar to Keynes' marginal efficiency of capital.  This theory details about the relationship between inflation and the real and nominal interest rates. The real interest rate equals the nominal interest rate minus the expected inflation rate. My theory also states that an increase in the growth rate of the money supply will cause an increase in inflation and normal interest rate, which will match the increase in inflation rate. In the long run, inflation will not affect the real interest rate. For the real interest rate to remain unaffected by inflation, the nominal interest rate must mimic the changes in the inflation rate. Example: If Inflation increases by 1% so will nominal interest rats. Many of interest is dependent on the individual and how indifferent they are towards the present; interest rises on account of time preference.

Fish Equation Formula:
Mathematical formula:
(1 + i)  = (1 + r) (1 + π)
i – the nominal interest rate
r – the real interest rate
π – the inflation rate

My theory of interest can also be labelled as the "impatience and opportunity" theory.
]]> 2019-05-24 10:56:04 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363232202 Influence On the Field Of Economics esther_han https://padlet.com/yan_zhou/lkumopo69d6u/wish/363300392 I have made great contributions to the field of economics. No other American economists before World War 2 impacted modern economy as much as i did. Although my work covered a wide range of topics, I was mostly specialized in macroeconomics. I made seminal contributions across an astonishing spectrum of economic science: monetary policy rules, the neoclassical theory of interest, expected inflation as the difference between real and nominal interest, the Fisher "ideal" index number, indexed bonds, correlation analysis, distributed lags, the "Phillips curve," the debt-deflation process, taxing consumption rather than income, the value of human capital and improvement in health. ]]> 2019-05-24 14:52:01 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363300392 Tax yan_zhou https://padlet.com/yan_zhou/lkumopo69d6u/wish/363304418 I actually oppose conventional income taxation and favor tax on consumption; I talk about the concept behind Unlimited Savings Accumulation Tax in my 1942 book Constructive Income Taxation: A proposal for Reform . I believe that the income tax system taxes investors twice. Once when investors earn the money and once again when their savings generate a taxable income. Thus, I believed that income tax is bias towards saving right than consumption. I hope to eliminate this bias by lifting taxation on income and charge a larger tax on consumption goods. The more money people see in their bank account the more likely they are to consume. By consuming more goods, the tax emplaced on those goods counts to more government revenue. Households may also see that tax on unnecessary goods are very high and will refrain from buying which leads to more funding available for investment]]> 2019-05-24 15:03:59 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363304418 Debt Deflation yan_zhou https://padlet.com/yan_zhou/lkumopo69d6u/wish/363313242 Debt deflation is a theory of economic crisis I created during the stock market crash in 1929, which led to the Great Depression. The theory states that recessions and depressions are due to the overall level of debt rising in real value because of deflation, causing people to default on their consumer loans and mortgages. The theory I proposed shows recessions and depressions.
In the theory I detail about "credit bubble" which bursts when crisis arises. 
There are 9 main side effects when the "credit bubble" bursts:
1. Debt liquidation and distress selling
2. Contraction of the money supply as bank loans are paid off
3. Fall in the level of good prices
4. Greater fall in the net worth of businesses which can lead to bankruptcies
5. A fall in profits
6. A reduction in output, trade, and employment
7. Animal spirits are down
8. Households save more money
9. Fall in nominal interest rates and rise in deflation-adjusted interest rates]]> 2019-05-24 15:33:06 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363313242 Main Theories yan_zhou https://padlet.com/yan_zhou/lkumopo69d6u/wish/363315978 1. Utility Theory
2. Theory of Demand
I developed the concept of indifference curves and drew price and income lines. I also mentioned the superior and inferior goods and the substitutability and complementarity between goods.
3. Capital
In my book The Nature of Capital and Income, I discuss that capital and income are derived from the realities of economic. Capital consists of a stock of goods while income is a flow of services. The Keynesian marginal efficiency of capital is based upon my approach.  Capital is any asset that produces a flow of income over time.
4. Interest
My theory of interest is a non-monetary theory. Therefore I did not distinguish between real and monetary rate of interest.
5. Monetary Economic (Quantity Theory of Money; Appreciation and Interest)
My main interest was the monetary theory—how money, interest rates, and prices were all related. 
6. Debt Deflation]]> 2019-05-24 15:40:53 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363315978 Money Ilusion yan_zhou https://padlet.com/yan_zhou/lkumopo69d6u/wish/363315983 An inability to distinguish a dollar from the purchasing power of the dollar (what the dollar could buy after inflation).
Examples of money illusions:
Workers received higher wages so are happy to spend on more goods. However, when wages increase there is also a typical increase in higher price levels. So this bigger pay check may mean they can actually buy fewer things due to inflation.
I believe that this "money illusion" is responsible for the business cycle. When businesses believe that during time of inflation, high real interest rates, and high nominal interest rates they should stop borrowing and investing. This slows down economic growth. Economy slows down so business increase their borrowing and investment mistaking the slowdown for cut in real interest. Expanding economy generates inflationary pressures, banks will raise nominal rates to maintain the real interest rates. Business mistake this as higher real rates and investments falls. This an endless cycle, which I believe shows how economic expansion and contraction cause the business cycle.]]> 2019-05-24 15:40:54 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363315983 Bibliography esther_han https://padlet.com/yan_zhou/lkumopo69d6u/wish/363330385 https://www.econlib.org/library/Enc/bios/Fisher.html

https://www.britannica.com/biography/Irving-Fisher

https://www.britannica.com/topic/money/Monetary-theory#ref247609

https://en.wikipedia.org/wiki/Irving_Fisher#Economic_theories

https://study.com/academy/lesson/irving-fisher-biography-theory-of-interest-quiz.html

https://corporatefinanceinstitute.com/resources/knowledge/economics/fisher-equation/

https://www.investopedia.com/terms/f/fishereffect.asp

https://ideas.repec.org/a/cup/jhisec/v35y2013i02p153-177_00.html

https://www.independent.org/publications/tir/article.asp?id=664

http://www.economicsdiscussion.net/theories-of-money/quantity-theory-of-money-with-diagram/6387

https://breakingdownfinance.com/finance-topics/finance-basics/fisher-index/

https://www.encyclopedia.com/people/social-sciences-and-law/economics-biographies/irving-fisher#A

https://www.econlib.org/library/Enc/bios/Fisher.html
https://www.newworldencyclopedia.org/entry/Irving_Fisher

]]> 2019-05-24 16:27:33 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363330385 Quantity Theory of Money (part of Monetary Economics) yan_zhou https://padlet.com/yan_zhou/lkumopo69d6u/wish/363338819 I believe that in the long run, changes in the money supply will result in corresponding amounts of inflation. 

Original equation of exchange: MV = PT or P =MV/T
M= total stock of money
P= Price level
T= Amount of transactions carried out using money
V= velocity of circulation of money 

Modified Equation of Exchange after criticism: PT = MV + M1 V1 (or) P = MV + M1V1/T 
T= real output Y (or Q) usually GDP

Factors that determine the velocity of circulation of money: 
  1. System of payment
  2. Development of credit and finance
  3. The speed with which money is transported
  4. Community’s consumption and saving habits
  5. Expectation regarding future incomes and prices of goods and services.

My Quantity Theory states that the if we increase the number of dollars by renaming, debasing, or increasing coins, price will be increased in the same proportion. But this happens if the velocity of circulation and the volume of trade remains unchanged. 

]]> 2019-05-24 16:57:49 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363338819 Comments below this line please (make ur own post pls) yan_zhou https://padlet.com/yan_zhou/lkumopo69d6u/wish/363419813

Milton Friedman
Dear Fisher,

As a prominent economic thinker, your ideas have influenced some of my works, such as ones related to monetary policy. This can also be seen when I adopted the Fisher effect in the inflation buildup in the 1960s and your empirical approach to inflationary expectations.

Furthermore, I appreciate your dedication and interest to monetary economics, and your research into the quantity theory of money has been the foundation of some of my works.

Sincerely,

Milton Friedman

Dear Mr. Friedman,

I'm so glad I was such a big influence on you especially with the Fisher effect. Your work is especially interesting to ready and appreciate your kind words. We have many viewpoints in common although I find your income tax proposal appealing, I suggest another course of action. I propose a tax on unnecessary goods which is more ethical.

Sincerely,
Irving Fisher


]]> 2019-05-25 03:55:03 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363419813 Influence On Milton Friedman yan_zhou https://padlet.com/yan_zhou/lkumopo69d6u/wish/363419814 As one of the earliest neoclassical economist, it should come to no surprise that I have influenced many economists after me. Friedman and Schwartz in their Monetary History of the United States (1963) has even cited me. 

My Fisher Effect has even influenced him as the foundation for his monetary policy.]]> 2019-05-25 03:55:04 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363419814 Friedrich August von Hayek emily_lou https://padlet.com/yan_zhou/lkumopo69d6u/wish/363532040 Mr. Fischer,
The ideas you have presented, though interesting, go completely against my own - especially your ideas on taxes. I do not believe that taxes should be applied by the government to the economy. Your idea to lift income tax and to charge a larger tax on consumption of goods will have no impact on the economy, as a higher tax on goods would have the same impact as the income tax: people would only spend on the necessities. With income tax, they will see a smaller amount in their bank account, discouraging them to spend, and with consumption taxes, the cost for goods will increase, also discouraging them to save. What’s the point? Taxes as a whole should just be eliminated, as it will post a drag on the economy. Government’s should leave the economy to be free of intervention. That way, the economy will be free to grow on its own.

-F.A. Hayek

Mr. Hayek,
I see your points and we are two very different economists with very different viewpoints. I believe that in times of crisis the government should get involved in order to keep the economy on track. By charging on a large amount on consumption goods, the government is able to earn more revenues. Charging a large amount on income tax harms low-income households and which is large promotion of their income. They are unable to buy essential items for their living. By taxing consumption goods that are not essential items, it is more ethical.

Sincerely,
Irving Fisher.
]]> 2019-05-26 10:32:06 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363532040 Paul Krugman alana_lo https://padlet.com/yan_zhou/lkumopo69d6u/wish/363539963 Dear Mr.Fisher, 
I acknowledge that you have made many economic theories that are very persuading, especially in debt deflation that captured my interest. Since I identify myself as a Keynesian, your Quantity Theory of Money, had me questioned. I conceded with what Mr.Keynes had challenged about this theory, saying that increases in money supply lead to a decrease in the velocity of circulation and that real income the flow of money to the factors of production increased. Therefore, velocity could change in response to changes in the money supply. 

Hi Mr Krugman 
I understand your concerns to the Quantity Theory of Money. The quantity theory of money is very important since it states that in the long run, changes in the money supply will result in corresponding amounts of inflation. 
 
]]> 2019-05-26 12:32:32 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363539963 Arthur Laffer grace_lam1 https://padlet.com/yan_zhou/lkumopo69d6u/wish/363544331 Hi Mr. Fisher,

The number of theories in different aspects of macroeconomics that you've studied is very impressive. What I'm most well known for is my theory of the Laffer Curve, which shows the relationship between tax rates and the amount of tax revenue collected by governments. I see that you have done some research on tax as well. It is interesting that you're looking at the problem from a different point of view. Unlike many others, you prefer taxing the consumptions of goods and not the income. I agree that income taxes should be lowered. This is because by lowering tax people would have more incentive to work, therefore, although the percent collect is smaller, the amount collected is higher because the total amount is greater. Aside from the general Laffer curve most know, I have another curve called the Laffer curve for consumption. In this curve, is shows that the revenue collected will continue to rise as the tax increase, just at a slower rate. 

Sincerely,
Arthur Betz Laffer

Mr. Laffer,

I glad that we agree quite well on our viewpoint on tax. I do believe that by taxing the right goods can lead to higher government revenue. Taxing a large amount on income will lower the incentive to work, and it harms poorer households more. By taxing a smaller amount, households' animal spirits rise and are more likely to consume more. So by taxing consumed goods the government can earn more revenue. 

Sincerely,
Irving Fisher]]> 2019-05-26 13:24:41 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363544331 Jerome Powell alan_sun1 https://padlet.com/yan_zhou/lkumopo69d6u/wish/363738008 Hi Mr. Fisher,
I am currently the chair of the federal reserve. Your ideas and theories on the interest rate and monetary policy are one of the inspirations for my many policies. I appreciate your theory of money illusion it really does explain the state of the economy.

Hello Mr.Powell,
I'm glad to hear that my ideas and theories on interest rate and monetary policy was inspiring to you. My works have not touch directly on current social issues instead I focused on explaining the relationship between price and inflation, therefore I would love to hear more of your thoughts and your insights about the topic.]]> 2019-05-27 12:10:48 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363738008 yan_zhou https://padlet.com/yan_zhou/lkumopo69d6u/wish/363796439 2019-05-27 17:22:13 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363796439 yan_zhou https://padlet.com/yan_zhou/lkumopo69d6u/wish/363796753 2019-05-27 17:24:13 UTC https://padlet.com/yan_zhou/lkumopo69d6u/wish/363796753