From Bloomberg's Echoes blog:
When speculative bubbles form, as they did in the 1920s and the late 1990s, the financial community invariably listens to academic entrepreneurs peddling their pet philosophies about the financial boom.
There have been many such financial celebrities, though Irving Fisher, the son of an itinerant minister from New York and Connecticut, may have been the first.
Fisher was born Feb. 27, 1867, in Saugerties, New York. Throughout his footloose youth, he thrived at public and private schools that demanded mathematical rigor. Eventually, he entered Yale University as a science major. He ended up in a new area of study called economics. He received his doctorate with one of Yale’s first economics dissertations, and remained associated with the university for the rest of his life.
Fisher was obviously brilliant, though health problems stemming from a bout of tuberculosis early in his career forced him to postpone his plans. This mishap also gave him a taste of his own vulnerability and a lifelong concern for health and eugenics, the now-discredited study of methods designed to improve the genetics of the population.And from October 13:
Once returned to health, Fisher developed revolutionary insights into financial theory that are still invoked today. He explained that the market interest rate coincides with the human tendency to discount an uncertain future when compared with the more pressing present. He argued that we distribute our present and expected future wealth over the consumption decisions we make now and in the future. In doing so, he anticipated the life-cycle hypothesis that would demonstrate, half a century later, why we save and how we consume....MORE
Cashing in: "Rise of the celebrity economist"
Markets are as unstable as during any point in American history -- and a select few have found a way to capitalize
A year after Lehman Brothers collapsed, Paul Krugman took his fellow economists to task over a host of professional and intellectual failures. With the New York Times as his pulpit, he began his omniscient narration: “The central cause of the profession’s failure was the desire for an all-encompassing, intellectually elegant approach that also gave economists a chance to show off their mathematical prowess. Unfortunately, this romanticized and sanitized vision of the economy led most economists to ignore all the things that can go wrong,” he wrote. “They turned a blind eye to the limitations of human rationality… to the problems of institutions that run amok; to the imperfections of markets… and to the dangers created when regulators don’t believe in regulation.”...