Thursday, January 28, 2016

Funny guy, Irving Fisher

From The Debt-Deflation Theory of Great Depressions (1933) by Irving Fisher:
5. The innumerable tendencies making mostly for economic dis-equilibrium may roughly be classified under three groups: (a) growth or trend tendencies, which are steady; (b) haphazard disturbances, which are unsteady; (c) cyclical tendencies, which are unsteady but steadily repeated.

6. There are two sorts of cyclical tendencies. One is "forced" or imposed on the economic mechanism from outside. Such is the yearly rhythm; also the daily rhythm. Both the yearly and the daily rhythm are imposed on us by astronomical forces from outside the economic organization; and there may be others such as from sun spots or transits of Venus. Other examples of "forced" cycles are the monthly and weekly rhythms imposed on us by custom and religion.

The second sort of cyclical tendency is the "free" cycle, not forced from outside, but self-generating, operating analogously to a pendulum or wave motion.

7. It is the "free" type of cycle which is apparently uppermost in the minds of most people when they talk of "the" business cycle. The yearly cycle, though it more nearly approaches a perfect cycle than any other, is seldom thought of as a cycle at all but referred to as "seasonal variation."
5b: haphazard disturbances are today called "shocks".

5c: by "steadily repeated" I think Fisher means happening over and over, not on a regular timetable.

6: it seems to me that these two sorts of cyclical tendencies have been generalized into "exogenous" and "endogenous".

7: this one cracks me up.

No comments: