Was Irving Fisher the first monetarist?
In most respects, Irving Fisher appears to be the precursor of Milton Friedman and the first monetarist. In 1911, Fisher published It was his restatement of the quantity theory of money. In 1925, he authored 鈥淭he Business Cycle Largely a 鈥楧ance of the Dollar,鈥欌�� in which he attributed business cycles to changes in the value of money.
Yet by 1933, Fisher felt the need to add some additional factors to explain the magnitude of the Great Depression. He did so in 鈥淭he Debt-Deflation Theory of Great Depressions.鈥� In his (1964), Joseph Schumpeter states that Fisher downplayed the importance of his own theory. Schumpeter argues (1122) that the Debt-Deflation theory 鈥渁pplies to all recorded business cycles and is in essence not monetary at all.鈥�
So is Fisher a monetarist or a real theorist of the business cycle?
In the (1963), Friedman and Schwartz cite Fisher but not for his debt-deflation theory. In 鈥淢oney and Business Cycles鈥� (1963), they cite the 鈥淒ance of the Dollar鈥� article. Perhaps Friedman and Schwartz were chary of the later Fisher for a reason.
This issue has come up again in Charles Rowley and Nathanael Smith鈥檚 (Locke Institute 2009). They argue that Friedman and Schwartz overreached in their monetary explanation of the Great Depression. Rowley and Smith find the theoretical basis for the Friedman-Schwartz view to be 鈥渨eak鈥� (p. 11). And Rowley and Smith cite Fisher (1911) against Friedman and Schwartz.
My question is not rhetorical. Fisher is a complicated figure, and only becomes more so if one considers his relationship with the Austrians. Mises and Hayek had great respect for him, as did Schumpeter.
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