Irving Fisher (Essay Sample)

Irving Fisher
Name
Institution
Irving Fisher
Brief Descriptions
Irving Fisher (1867-1947) was a renowned American Economist who also served as a mathematician, teacher, and statistician (Tobin, 2005). From these disciplines, he turns out to have diverse interests to change the economic and social world. An exploration of his contributions in economics can be attributed to the great mathematical skills that inspired his doctoral dissertation “Mathematical Investigation in the Theory of Value and Price” that later published in 1892 (Dimand, 2019). Some of his great works include The Rate of Interest, Elementary Principles of Economics, Money Illusion, Booms and Depression, and 100 Percent Money. From the contributions in the field of economics, it is evident that he was more interested in the field of capital, interest, and money.
Contributions to Economics
First, Fisher made key contributions in the concept of interest, arguing that economists had been struggling to determine the rate of interest (Markarian, 2018). The three factors used to solve the challenge were preference for present good, productivity, risks, and uncertainties. From these factors, the rate of interest is more determined by the rate of interest and the preference for the present goods. These contributions are in agreement with Keynes’ marginal efficiency of capital. Furthermore, Fisher integrated productivity and preference theories of interest, although he did not distinguish between the monetary and the real rate of interest.
Secondly, Fisher made extensive contributions to the concept of capital in his works “The Nature of Capital and Income” (Markarian, 2018). In this book, he insisted that income and capital are not abstract concepts since they are derivatives from the economic life’s realities. Besides, he proposed that capital’s value is the discounted value of the income in the future derived from the capital. These ideas have been proven using both empirical and theoretical studies in the recent past. For example, the Keynesian marginal efficiency is based on Fisher’s approach to capital.
Fisher is also popular for theories such as the business cycle and the theory of demand. The former assists in the understanding of business fluctuations which is a result of the changes in credit. Having described depression and its causes, Fisher suggested that economics and influential policymakers should concentrate on reflation, an intervention to be initiated by the central bank (Dimand, 2019). The theory of demand was based on the cardinal utility analysis, which is similar to the indifference curves under Edgeworth. However, Fisher’s work was different since he used the income and price line.
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