Hostname: page-component-76fb5796d-25wd4 Total loading time: 0 Render date: 2024-04-25T07:12:48.563Z Has data issue: false hasContentIssue false
  • English
  • Français

WICKSELL ON THE AMERICAN CRISIS OF 1907

Published online by Cambridge University Press:  31 May 2011

MAURO BOIANOVSKY
Get access Rights & Permissions [Opens in a new window]

Abstract

The article discusses Knut Wicksell’s interpretation of the American crisis of 1907, which he presented in a piece published in Swedish in 1908. Wicksell advanced, probably for the first time in the literature, a clear distinction between the “solvency” and “liquidity” of banks, and discussed its implications for the interpretation of crises. Moreover, he called attention to a third desirable attribute of a bank: “flexibility”; that is, the ability to satisfy credit demand at an adequate rate of interest. Wicksell linked that with his better known concept of the cumulative process and the stabilization policy associated with it.

Type
Research Articles
Information
Journal of the History of Economic Thought , Volume 33 , Issue 2 , June 2011 , pp. 173 - 185
Copyright
Copyright © The History of Economics Society 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Bagehot, W. [1873] 1915. Lombard Street. London: John Murray.Google Scholar
Boianovsky, M. 1995. “Wicksell’s Business Cycle.” European Journal of the History of Economic Thought 2: 375–411.CrossRefGoogle Scholar
Boianovsky, M. 1998. “Real Balances, the Price Level and the Unit of Account: From Wicksell to Patinkin and Beyond.” American Journal of Economics and Sociology 57: 579–612.CrossRefGoogle Scholar
Boianovsky, M., and Erreygers, G. 2005. Social Comptabilism and Pure Credit Systems: Solvay and Wicksell on Monetary Reform. In Fontaine, P. and Leonard, R., eds., The Experiment in the History of Economics. London: Routledge: 98–134.Google Scholar
Boianovsky, M., and Presley, J. R. 2009. “The Robertson Connection between the Natural Rates of Interest and Unemployment.” Structural Change and Economic Dynamics 20: 136–150.CrossRefGoogle Scholar
Boianovsky, M., and Tarascio, V. 1998. “Mechanical Inertia and Economic Dynamics: Pareto on Business Cycles.” Journal of the History of Economic Thought 20: 5–23.CrossRefGoogle Scholar
Boianovsky, M., and Trautwein, H.-M. 2001. “Wicksell’s Lecture Notes on Economic Crises (1902/05).” Structural Change and Economic Dynamics 12: 343–366.CrossRefGoogle Scholar
Boianovsky, M., and Trautwein, H.-M. 2006. “Wicksell after Woodford.” Journal of the History of Economic Thought 28: 171–185.CrossRefGoogle Scholar
Bruner, C., and Carr, S. 2009. The Panic of 1907: Lessons Learned from the Market’s Perfect Storm. Paperback edition. Hoboken: John Wiley & Sons.Google Scholar
de Boyer des Roches, J. 2009. “Bank Liquidity Risk, from John Law (1705) to Walter Bagehot (1873).” Paper presented at the 2009 ESHET meetings.Google Scholar
Conant, C. A. [1927] 1969. A History of Modern Banks of Issue. New York: Kelley.Google Scholar
The Economist. 1907. “The Money Market”; “The American Crisis and a Comparison”; “The Progress of the American Crisis”.Vol. LXV: 1853 –1856. November 2Google Scholar
Fisher, I. 1907. “Fundamental Cause of the Panic.” Yale Review 16: 229–232.Google Scholar
Fisher, I. N. 1961. A Bibliography of the Writings of Irving Fisher. New Haven: Yale University Library.Google Scholar
Friedman, M., and Schwartz, A. J. 1963. A Monetary History of the United States, 1867–1960. Princeton: Princeton University Press/NBER.Google Scholar
Gårdlund, T. 1958. The Life of Knut Wicksell. Stockholm: Almqvist and Wiksell.Google Scholar
Goodhart, C. A. E. 1969. The New York Money Market and the Finance of Trade, 1900–1913. Cambridge, Mass.: Harvard University Press.Google Scholar
Gorton, G. 1988. “Banking Panics and Business Cycles.” Oxford Economic Papers 40: 751–781.CrossRefGoogle Scholar
Hawtrey, R. G. 1913. Good and Bad Trade. London: Constable.Google Scholar
Kindleberger, C., and Aliber, R.. 2005. Manias, Panics and Crashes—A History of Financial Crises. Fifth edition. Hoboken: John Wiley & Sons.CrossRefGoogle Scholar
Krugman, P. 2009. The Return of Depression Economics and the Crisis of 2008. New York: Norton.Google Scholar
Moen, J., and Tallman, E. 1992. “The Bank Panic of 1907: The Role of the Trust Companies.” Journal of Economic History 52: 611–630.CrossRefGoogle Scholar
Morris, S., and Shin, H. 2009. “Illiquidity Component of Credit Risk.” Unpublished manuscript, Princeton University.Google Scholar
Pareto, V. [1907] 1967. “Crise financiére ou economique?” In Lettres D’Italie. Geneve: Dróz, pp. 159–161.Google Scholar
Rist, C. [1938] 1940. History of Monetary and Credit Theory. London: Allen & Unwin.Google Scholar
Robertson, D. H. [1934] 1940. “Industrial Fluctuation and the Natural Rate of Interest.” In Robertson, D. H., Essays in Monetary Theory. London: P.S. King & Son: 83–91.Google Scholar
Sprague, O. W. 1908. “The American Crisis of 1907.” Economic Journal 18: 353–372.CrossRefGoogle Scholar
Sprague, O. W. 1910. History of Crises under the National Banking System. Washington, DC: Government Printing Office.Google Scholar
Wicker, E. 2000. Banking Panics in the Gilded Age. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Wicksell, K. [1898] 1936. Interest and Prices. London: Macmillan.Google Scholar
Wicksell, K. [1906, 1915, 1929] 1935. Lectures on Political Economy. Volume II. London: Routledge & Sons.Google Scholar
Wicksell, K. [1907a] 1953. “The Enigma of Business Cycles.” International Economic Papers 3.Google Scholar
Wicksell, K. [1907b] 2001. “A New Theory of Crisis.” Structural Change and Economic Dynamics 12: 335–342.CrossRefGoogle Scholar
Wicksell, K. [1908a] 1997. “Why Are Factories Operations Being Curtailed?” In Sandelin, B., ed., Knut Wicksell—Selected Essays in Economics. Volume I. London: Routledge: 253–60.Google Scholar
Wicksell, K. [1908b] 1999. “Stabilizing the Value of Money: A Means of Preventing Crises.” In Sandelin, B., ed., Knut Wicksell—Selected Essays in Economics. Volume II. London: Routledge: 32–39.Google Scholar
Wicksell, K. 1908c. “En lektion i banklagstifning - Några lärdomar av den amerikanska krisen” [“A Lesson in Banking Legislation—Some Teachings from the American Crisis”]. Ekonomisk Tidskrift 10: 41–54.CrossRefGoogle Scholar
Wicksell, K. [1909] 1999. “The Money Rate of Interest and Commodity Prices.” In Sandelin, B., ed., Knut Wicksell—Selected Essays in Economics. Volume II. London: Routledge: 40–45.Google Scholar
Wicksell, K. 1914. “Economic Crises. ” Unpublished lecture notes. Wicksell Archives, Lund University Library.Google Scholar