Irving Fisher — The Debt-Deflation Theory of Great Depressions (1933)

Written in the depths of the Great Depression, the paper Minsky built on.

Irving Fisher, one of America’s most famous economists, was ruined by the 1929 crash. In this paper he explained how too much debt, followed by falling prices, can drive an economy into a spiral: people sell to pay debts, prices fall, and debts become even heavier.

Minsky called Fisher’s idea a starting point for his own theory. The Federal Reserve Bank of St. Louis offers it free through its FRASER digital library.

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