Garett Jones on Fisher, Debt, and Deflation

EconTalk

• Episode: Garett Jones on Fisher, Debt, and Deflation
• Website: EconTalk
• Feed URL: http://files.libertyfund.org/econtalk/EconTalk.xml
• Duration: 01:01:20
• Published: 2012-10-08 08:30

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.