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Knut Wicksell and Gustav Cassel on the Cumulative Process and the Price-Stabilizing Policy Rule

Published online by Cambridge University Press:  11 June 2009

Thomas M. Humphrey
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Extract

In economics as in anthropology, old artifacts spur continuing debates. A case in point is Knut Wicksell's 1898 analysis of the cumulative process of price inflation in pure credit, cashless economies. Some economists view Wicksell's model as a milestone in the evolution of quantity-theoretic monetary analysis inasmuch as it constitutes the seminal rigorous explanation of how loan-created stocks of bank money translate interest rate differentials into price level changes. Others, however, dispute this point and instead argue that money plays no role in determining price level changes in Wicksell's model.

Type
Research Article
Information
Journal of the History of Economic Thought , Volume 25 , Issue 2 , June 2003 , pp. 199 - 220
Copyright
Copyright © The History of Economics Society 2003

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