Economist Irving Fisher argues that debt deflation played a significant role in the Great Depression. He says that loose credit and over-indebtedness fueled speculation and asset bubbles.

He named a 9-factor chain of events that led to the Great Depression:

1. Debt liquidation and distress selling
2. Contraction of the money supply as bank loans are paid off
3. A fall in the level of asset prices
4. A still greater fall in the net worths of business, precipitating bankruptcies
5. A fall in profits
6. A reduction in output, in trade and in employment.
7. Pessimism and loss of confidence
8. Hoarding of money
9. A fall in nominal interest rates and a rise in deflation adjusted interest rates.[27]