Working Paper | HBS Working Paper Series | 2007

Irving Fisher, Economic Forecasting, and the Myth of the Business Cycle

by Walter A. Friedman


A premier economist of the twentieth century and a founder of neoclassical thought, Irving Fisher was also an active participant in the field of economic forecasting. Fisher made theoretical contributions to the understanding of economic fluctuations, popularized the use of index numbers, and wrote frequently on the importance of future expectations to businesspeople. He also published forecasts through syndicated newspaper columns and made public pronouncements on the future of the economy—including a notorious statement on the eve of the October 1929 stock-market crash that optimistically predicted that a new high "plateau" for stock prices had been reached. Despite Fisher's poor prediction on that occasion, he played a neglected, but significant role in the growth of the forecasting industry and in the rise of a class of early business analysts.

Keywords: Forecasting and Prediction; Economics; Business Cycles; Business History; Newspapers; Personal Development and Career;


Friedman, Walter A. "Irving Fisher, Economic Forecasting, and the Myth of the Business Cycle." Harvard Business School Working Paper, No. 08-037, November 2007.