ABSTRACT
Irving Fisher is the greatest economist America has produced. Economists had also developed a fairly sophisticated understanding of macroeconomics, that is, how the economy works as a whole. Jean-Baptiste Say's law of markets was almost universally accepted as the classical macroeconomic model: increased capital, technology, and productivity lead to rapidly rising living standards. But there was one piece missing from the economist's tool box—the mystery of money. Comprehending the role of money and credit, the lifeblood of the economy, was the unresolved link between micro and macro. Through monetarists, led by Milton Friedman and the Chicago school, Fisher's theoretical work lives on. Welcoming Franklin D. Roosevelt's bank holiday in 1933, Fisher felt the bottom had been reached and he could finally stave off bankruptcy. Thus, according to Fisher, capital was fluid enough that the economy could adjust quickly to any kind of capital dislocation and economic crisis.
