a student of economic faculty Rudakova
27 февраля 1867 – 29 апреля 1947
of interest and capital
the price level
Friedman and James Tobin called Fisher
"the greatest economist the United States
has ever produced." Some concepts named
after Fisher include the Fisher equation,
the Fisher hypothesis, the international Fisher
effect, and the Fisher separation theotem.
Fisher was an American economist, inventor, and health campaigner,
and one of the earliest American neoclassical economists.
made important contributions to utility theory
and general equilibrium. His work on the
quantity theory of money inaugurated the
school of economic thought known as “monetarism."
was perhaps the first celebrity economist,
but his reputation during his lifetime
was irreparably harmed by his public statements.
produced various inventions during his lifetime,
the most notable of which was an
"index visible filing system" which
he patented in 1913 and sold to Kardex
Rand (later Remington Rand) in 1925.
his subsequent stock investments, made him
a wealthy man until his personal finances
were badly hit by the Crash of 1929.
He was also an active social and
health campaigner, as well as an advocate
of vegetarianism, Prohibition, and eugenics.
Fisher was born in upstate New York
in 1867. He gained an eclectic education
at Yale, studying science and philosophy.
He published poetry and works on astronomy,
mechanics, and geometry. But his greatest
concentration was on mathematics and economics,
the latter having no academic department
at Yale. Nonetheless, Fisher earned the
first Ph.D. in economics ever awarded
by Yale. After graduation he stayed at
Yale for the rest of his career.
theory of interest and
of Fisher's energy went into social causes
and business ventures, and the better
part of his scientific effort was devoted
to monetary economics, he is best remembered
today in neoclassical economics for his
theory of interest and capital, studies
of an ideal world from which the
real world deviated at its peril.
enduring intellectual work has been his
theory of capital, investment, and interest
rates. His 1930 treatise, The Theory of
Interest, summed up a lifetime's work
on capital, capital budgeting, credit markets,
and the determinants of interest rates,
including the rate of inflation.
called interest “an index of a community’s
preference for a dollar of present [income]
over a dollar of future income.” He
labeled his theory of interest the “impatience
and opportunity” theory. Interest rates,
Fisher postulated, result from the interaction
of two forces: the “time preference”
people have for capital now, and the
investment opportunity principle (that income
invested now will yield greater income
in the future).
objected to Böhm-Bawerk’s idea that roundaboutness
necessarily increases production, arguing instead
that at a positive interest rate, no
one would ever choose a longer period
unless it were more productive. So if
we look at processes selected, we do
find that longer periods are more productive.
But, he argued, the length of the
period does not in itself contribute to
defined capital as any asset that produces
a flow of income over time. A flow
of income is distinct from the stock
of capital that generated it, although
the two are linked by the interest
rate. Specifically, wrote Fisher, the value
of capital is the present value of
the flow of income that the asset
generates. This still is how economists
think about capital and income today.
also opposed conventional income taxation and
favored a tax on consumption to replace
it. Fisher sees the starting point in
the foundations laid by him in 1906
("The Nature of Capital and Income"),
where he defines the conceptual distinction
between capital and income, with the income
he understands that cash flow that will
be used for consumption. Savings - is
the capital, and it can not, like
the income tax. Taxation of savings tax
prevents the capitalization and thus contributes
to higher unemployment. Fisher’s reasoning
is still used by economists today in
making the case for consumption taxes.
the price level
equals the stock of money
equals velocity, or how quickly money
circulates in an economy
equals the price level
equals the total volume of transactions.
also the first economist to distinguish
clearly between real and nominal interest
rates. He pointed out that the real
interest rate is equal to the nominal
interest rate (the one we observe) minus
the expected inflation rate.
out a more modern quantity theory of
money (i.e., monetarism) than had been
done before. He formulated his theory
in terms of the equation of exchange,
which says that:
was also the first economist to distinguish
clearly between real and nominal interest
equation is known as the Fisher equation
in his honor.
was a pioneer in the construction and
use of price indexes. James Tobin of
Yale called him “the greatest expert
of all time on index numbers.” Indeed,
from 1923 to 1936, his own Index
Number Institute computed price indexes from
all over the world. Index numbers played
an important role in his monetary theory,
and his book The Making of Index
Numbers has remained influential down to
the present day.
= - 1 = 1 - п
(1 + п)
- the real interest rate
the nominal interest rate
- the inflation is a measure of the increase in the price level
struggle with tuberculosis beginning in 1898
left Fisher with a profound interest in
health and hygiene. He took up vegetarianism
and exercise and wrote a national best-seller
titled How to Live: Rules for Healthful
Living Based on Modern Science, whose
value he demonstrated by living until
age eighty. He campaigned for Prohibition,
peace, and eugenics. He was a founder
or president of numerous associations and
agencies, including the Econometric Society
and the American Economic Association. He
was also a successful inventor. In 1925
his firm, which held the patent on
card index” system, merged with
its main competitor to form what later
was known as Remington Rand and then
Sperry Rand. Although the merger made
him very wealthy, he lost a large
part of his wealth in the stock market
crash of 1929.