## Wednesday, November 3, 2010

### Geometric Constants

An old London Banker post links to Irving Fisher's Debt-Deflation Theory of Great Depressions (PDF) which reads in part:

Disturbances in these two factors -- debt and the purchasing power of the monetary unit -- will set up serious disturbances in all, or nearly all, other economic variables. On the other hand, if debt and deflation are absent, other disturbances are powerless to bring on crises comparable in severity to those of 1837, 1873, or 1929-33.

I quote this for the dates. Fisher identifies three severe disturbances, to which we can add a fourth: Call it 2008.

I just want to do a little work with numbers here. I'm not gonna claim anything weird, other than what I'm showing you is weird.

It's 36 years from 1837 to 1873.

It's 56 years from 1873 to 1929.

56 years is 1.555 times as long as 36 years.

I want to test this number 1.555 as a geometric constant.

Suppose the next disturbance after 1929-33 comes after a period of years that is 1.555 times longer than 56 years.