Debt-deflation, balance sheet recession and the recent financial crisis 1

Irving Fisher has been a steady companion in Harald Hagemann’s academic career. As early as his doctoral dissertation (Hagemann 1977) Harald discussed Fisher’s concept of the rate of return as revitalized by Solow (1963) in his – as Harald showed, unsuccessful – attempt to rebut the Cambridge (UK) critics of neoclassical capital theory. Neglecting all his other contributions with references to Irving Fisher I will only mention one of his recent ones (Hagemann 2009), which is exclusively dedicated to Irving Fisher and the evaluation of this American scholar’s importance as an economist.