Hostname: page-component-78c5997874-xbtfd Total loading time: 0 Render date: 2024-11-17T23:33:33.217Z Has data issue: false hasContentIssue false
  • English
  • Français

WICKSELL, GENERAL EQUILIBRIUM, AND THE WAY TO MACROECONOMICS

Published online by Cambridge University Press:  15 August 2016

Mauro Boianovsky
Mauro Boianovsky*
Affiliation:
Universidade de Brasilia. mboianovsky@gmail.com.
Get access Rights & Permissions [Opens in a new window]

Abstract

Knut Wicksell’s formulation of monetary economics as the study of the relation between aggregate supply and aggregate demand played an important role in the development of macroeconomics. Wicksell’s contributions are better understood if we consider the Walrasian roots of his approach. Wicksell pointed to two shortcomings of Léon Walras’s theory: incomplete treatment of the demand for money, and lack of a concept of capital stressing the time element. Wicksell was influenced by Walras’s notions of the tâtonnement by which markets solve the equations and of the zero-profit entrepreneur. Nevertheless, Wicksell’s interpretation of the dynamics of the credit market, with a price (interest rate) distinct from its equilibrium (“natural”) level and the implicit recognition that the latter could assume negative values, did not fit into the Walrasian tâtonnement mold. As the first to produce textbooks on both theories of value and money, Wicksell was confronted with the problem of how to establish connections between them.

Type
Articles
Information
Journal of the History of Economic Thought , Volume 38 , Issue 3 , September 2016 , pp. 261 - 284
Copyright
Copyright © The History of Economics Society 2016 

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

Altmann, Salomon Paul. 1908. “Zur deutschen Geldlehre des 19. Jahrhunderts.” In Schmoller, G., ed., Die Entwicklung der deutschen Volkswirtschaftslehre. Volume 1. Leipzig: Duncker & Humblot, essay 6.Google Scholar
Backhouse, Roger E., and Boianovsky, Mauro. 2016. Transforming Modern Macroeconomics: Exploring Disequilibrium Microfoundations, 1956–2003. Cambridge: Cambridge University Press.Google Scholar
Backhouse, Roger E., and Boianovsky, Mauro. 2015. “Secular Stagnation: The History of a Macroeconomic Heresy.” European Journal of the History of Economic Thought. 23 (6).Google Scholar
Baird, Charles W. 1970. “Knut Wicksell on the Integration of Monetary and Value Theory.” Swedish Journal of Economics 72: 101–110.Google Scholar
Blaug, Mark. 1975. The Cambridge Revolution: Success or Failure? London: Institute of Economic Affairs.Google Scholar
Blaug, Mark. 1997. Economic Theory in Retrospect. Fifth edition. Cambridge: Cambridge University Press.Google Scholar
Böhm-Bawerk, Eugen von. [1889] 1891. The Positive Theory of Capital. Translated by Smart, W.. New York: Stechert.Google Scholar
Boianovsky, Mauro. 1995. “Wicksell’s Business Cycle.” European Journal of the History of Economic Thought 2: 375–411.Google Scholar
Boianovsky, Mauro. 1996. “Anticipations of the General Theory: The Case of F. B. Hawley.” History of Political Economy 28: 371–390.Google Scholar
Boianovsky, Mauro. 1998a. “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.Google Scholar
Boianovsky, Mauro. 1998b. “Wicksell, Ramsey and the Theory of Interest.” European Journal of the History of Economic Thought 5: 140–168.Google Scholar
Boianovsky, Mauro. 2009. “Some Swedish Stepping-Stones to Growth Economics.” In Boianovsky, M. and Hoover, K. D., eds., “Robert Solow and the Development of Growth Economics.” Annual supplement, History of Political Economy 41: 47–66. Durham: Duke University Press.Google Scholar
Boianovsky, Mauro. 2013a. “Fisher and Wicksell on Money: A Reconstructed Conversation.” European Journal of the History of Economic Thought 20: 206–237.Google Scholar
Boianovsky, Mauro. 2013b. “Before Macroeconomics: Pareto and the Dynamics of the Economic Aggregate.” Revue Européenne des Sciences Sociales 51–52: 103–131.Google Scholar
Boianovsky, Mauro. 2016. “Knut Wicksell on Utility and Market Aggregation.” History of Political Economy 48: 307–340.CrossRefGoogle Scholar
Boianovsky, Mauro, and Trautwein, Hans-Michael. 2003. “Wicksell, Cassel, and the Idea of Involuntary Unemployment.” History of Political Economy 35: 385–436.Google Scholar
Boianovsky, Mauro, and Trautwein, Hans-Michael. 2007. “Johan Åkerman vs. Ragnar Frisch on Quantitative Business Cycle Analysis.” European Journal of the History of Economic Thought 14: 487–517.Google Scholar
Boianovsky, Mauro, and Trautwein, Hans-Michael. 2010. “The New Neoclassical Synthesis and the Wicksell-Keynes Connection.” In Bateman, B., Hirai, T., and Marcuzzo, M. C., eds., The Return to Keynes. Cambridge, MA: The Belknap Press of Harvard University Press, pp. 108–132.Google Scholar
Brems, Hans. 1986. Pioneering Economic Theory, 1630–1980: A Mathematical Restatement. Baltimore: Johns Hopkins University Press.Google Scholar
Bridel, Pascal. 2002. “Patinkin, Walras and the ‘Money-in-the-Utility-Function’ Tradition.” European Journal of the History of Economic Thought 9: 268–292.Google Scholar
van Daal, Jan, and Walker, Donald. 1990. “The Problem of Aggregation in Walras’s General Equilibrium Theory.” History of Political Economy 22: 489–505.Google Scholar
Fisher, Irving. [1911] 1913. The Purchasing Power of Money. Revised edition. New York: Macmillan.Google Scholar
Frisch, Ragnar. 1933. “Propagation Problems and Impulse Problems in Dynamic Economics.” In Economic Essays in Honour of Gustav Cassel. London: Allen & Unwin, pp. 171–205.Google Scholar
Gårdlund, Torsten. 1958. The Life of Knut Wicksell. Stockholm: Almqvist and Wiksell.Google Scholar
Hahn, Frank. 1965. “On Some Problems of Proving the Existence of Equilibrium in a Monetary Economy.” In Hahn, F. and Brechling, F., eds., The Theory of Interest Rates. London: Macmillan, pp. 126–135.Google Scholar
Helfferich, Karl. 1903. Das Geld. Leipzig: Hirschfeld.Google Scholar
Hennings, Klaus H. 1997. The Austrian Theory of Value and Capital—Studies in the Life and Work of Eugen von Böhm-Bawerk. Cheltenham: Edward Elgar Publishing.Google Scholar
Hicks, John. [1939] 1946. Value and Capital. Second edition. Oxford: Clarendon Press.Google Scholar
Hutchison, Terence W. 1998. “Ultra-deductivism from Nassau Senior to Lionel Robbins and Daniel Hausman.” Journal of Economic Methodology 5: 43–91.Google Scholar
Jevons, William Stanley. [1871] 1965. The Theory of Political Economy. New York: Augustus M. Kelley.Google Scholar
Joplin, Thomas. 1828. Views on the Currency. London: James Ridgway.Google Scholar
Journal of the History of Economic Thought 28 (2006): 139–198. Mini-symposium about Woodford’s Interest and Prices.Google Scholar
Keynes, John Maynard. 1936. The General Theory of Employment, Interest and Money. London: Macmillan.Google Scholar
Klein, Lawrence. 1947. The Keynesian Revolution. New York: Macmillan.Google Scholar
Laidler, David. 1972. “On Wicksell’s Theory of Price Level Dynamics.” Manchester School 40: 125–144.Google Scholar
Laidler, David. 1991. The Golden Age of the Quantity Theory. New York: Philip Allan.Google Scholar
Laidler, David. 1999. Fabricating the Keynesian Revolution. Cambridge: Cambridge University Press.Google Scholar
Lange, Oskar. 1942. “Say’s Law: A Restatement and Criticism.” In Lange, O., McIntyre, F., and Yntena, T. O., eds., Studies in Mathematical Economics and Econometrics—In Memory of Henry Schultz. Chicago: University of Chicago Press, pp. 49–68.Google Scholar
Lange, Oskar. 1944. Price Flexibility and Employment. Bloomington: Principia Press.Google Scholar
Leijonhufvud, Axel. 1968. On Keynesian Economics and the Economics of Keynes. New York: Oxford University Press.Google Scholar
Leijonhufvud, Axel. 1981. “The Wicksell Connection: Variations on a Theme.” In Information and Coordination: Essays in Macroeconomic Theory. New York: Oxford University Press, pp. 131–202.Google Scholar
Lerner, Abba P. 1940. “Some Swedish Stepping Stones in Economic Theory.” Canadian Journal of Economics and Political Science 6: 574–591.Google Scholar
Lindahl, Erik. 1939. Studies in the Theory of Money and Capital. London: Allen & Unwin.Google Scholar
Lundberg, Erik. [1937] 1964. Studies in the Theory of Economic Expansion. New York: Augustus M. Kelley.Google Scholar
Marget, Arthur W. [1938] 1966a. The Theory of Prices. Volume I. New York: Augustus M. Kelley.Google Scholar
Marget, Arthur W. [1942] 1966b. The Theory of Prices. Volume II. New York: Augustus M. Kelley.Google Scholar
Marshall, Alfred. [1890] 1990. Principles of Economics. London: Macmillan.Google Scholar
Mises, Ludwig von. 1912. Theorie des Geldes und der Umlaufsmittel. Munich: Duncker & Humblot.Google Scholar
Myrdal, Gunnar. [1939] 1965. Monetary Equilibrium. New York: Augustus M. Kelley.Google Scholar
Niehans, Jürg. 1978. The Theory of Money. Baltimore: Johns Hopkins University Press.Google Scholar
Niehans, Jürg. 1990. A History of Economic Theory. Baltimore: Johns Hopkins University Press.Google Scholar
Ohlin, Bertil. [1898] 1936. Introduction. In Wicksell, Knut, Interest and Prices. Translated by Kahn, R. F.. London: Macmillan, pp. vii–xxi.Google Scholar
Pareto, Vilfredo. [1896–97] 1964. Cours D’Économie Politique. Genève: Librairie Droz.Google Scholar
Patinkin, Don. [1956] 1965. Money, Interest, and Prices. New York: Harper & Row.Google Scholar
Patinkin, Don. 1982. Anticipations of the General Theory? And Other Essays on Keynes. Oxford: Basil Blackwell.Google Scholar
Ramsey, Frank. 1928. “A Mathematical Theory of Saving.” Economic Journal 38: 543–559.Google Scholar
Rist, Charles. [1948] 1940. History of Monetary and Credit Theories. Translated by Degras, J.. London: Allen & Unwin.Google Scholar
Samuelson, Paul A. 1987. “Wicksell and Neoclassical Economics.” In Eatwell, J., Milgate, M., and Newman, P., eds., The New Palgrave Dictionary of Economics. Volume 4. London: Macmillan, pp. 908–910.Google Scholar
Schumpeter, Joseph A. 1954. History of Economic Analysis. New York: Oxford University Press.Google Scholar
Siven, Claes-Henric. 1997. “Capital Theory and Equilibrium Method in Wicksell’s Cumulative Process.” History of Political Economy 29: 201–217.Google Scholar
Solow, Robert M. 2011. “Macroeconomics and the Uses of General Equilibrium.” In Bridel, P., ed., General Equilibrium Analysis—A Century after Walras. London: Routledge, pp. 98–101.Google Scholar
Tooke, Thomas. 1844. An Inquiry into the Currency Principle. London: Longman, Brown, Green.Google Scholar
Velupillai, K. Vela. 2008. “The Mathematization of Macroeconomics—A Recursive Revolution.” Discussion paper #7. Department of Economics. Trento: Universitá degli Studi di Trento.Google Scholar
Walras, Léon. [1874] 1954. Elements of Pure Economics. Translated and edited by Jaffé, W.. London: Allen & Unwin.Google Scholar
Weintraub, E. Roy. 1979. Microfoundations: The Compatibility of Microeconomics and Macroeconomics. Cambridge: Cambridge University Press.Google Scholar
Wicksell, Knut. [1889] 2001. “Bank Rate of Interest as the Regulator of Prices.” Edited and translated by Boianovsky, M. and Trautwein, H.-M.. History of Political Economy 33: 509–516.Google Scholar
Wicksell, Knut. [1893] 1954. Value, Capital and Rent. Translated by Frowein, S. H.. London: Allen & Unwin.Google Scholar
Wicksell, Knut. 1897. “Der Bankzins als Regulator der Werenpreise.” Jahrbücher fur Nationalökonomie und Statistik 68: 228–243.Google Scholar
Wicksell, Knut. [1898] 1936. Interest and Prices. Translated by Kahn, R. F.. London: Macmillan.Google Scholar
Wicksell, Knut. [1899] 1999. “Review of Walras’s Études d’Économie Politique Appliquée and Théorie de la Production de la Richesse Sociale.” Translated by Chamberlain, T.. In Sandelin, B., ed., Knut Wicksell—Selected Essays in Economics. Volume II. London: Routledge, pp. 175–180.Google Scholar
Wicksell, Knut. [1901] 1934. Lectures on Political Economy. Translated by Classen, E.. Volume I. London: Routledge & Sons.Google Scholar
Wicksell, Knut. 1903. “Den dunkla punkten i penningteorien.” Ekonomisk Tidskrift 5: 485–507.Google Scholar
Wicksell, Knut. [1904] 1958. “Ends and Means in Economics. In Lindahl, E., ed., Knut Wicksell—Selected Papers in Economics. London: Allen & Unwin, pp. 51–66.Google Scholar
Wicksell, Knut. [1904] 1999. “The Monetary Problems of the Future.” Translated by Chamberlain, T.. In Sandelin, B., ed., Knut Wicksell—Selected Essays in Economics. Volume II. London: Routledge, pp. 12–31.Google Scholar
Wicksell, Knut. 1906. Föreläsningar i nationalekonomi, häft II (Om penningar och kredit). Stockholm: C.E. Fritzes Hofbokhandel.Google Scholar
Wicksell, Knut. [1906] 1935. Lectures on Political Economy. Translated by Classen, E.. Volume II. London: Routledge & Sons.Google Scholar
Wicksell, Knut. [1907] 1953. “The Enigma of Business Cycles.” Translated by Uhr, C.. International Economic Papers 3: 58–74.Google Scholar
Wicksell, Knut. [1908] 1997. “Why Are Factory Operations Being Curtailed?” Translated by Chamberlain, T.. In Sandelin, B., ed., Knut Wicksell—Selected Essays in Economics. Volume I. London: Routledge, pp. 253–260.Google Scholar
Wicksell, Knut. [1908] 2001. “A New Theory of Crises.” Translated by Homolka, V.. Structural Change and Economic Dynamics 12: 335–342.Google Scholar
Wicksell, Knut. [1914] 1999. “Review of Mises, Theorie des Geldes und der Umlaufsmittel.” Translated by Chamberlain, T.. In Sandelin, B., ed., Knut Wicksell—Selected Essays in Economics. Volume II. London: Routledge, pp. 220–224.Google Scholar
Wicksell, Knut. [1919] 1934. “Professor Cassel’s System of Economics.” In Lectures on Political Economy. Translated by Classen, E.. Volume I. London: Routledge & Sons, pp. 219–273.Google Scholar
Wicksell, Knut. [1925] 1936. “The Monetary Problems of the Scandinavian Countries.” Translated by Norberg, H.. Appendix to Wicksell, 1936, Interest and Prices. London: Macmillan, pp. 199–219.Google Scholar
Woodford, Michael. 2003. Interest and Prices: Foundations of a Theory of Monetary Policy. Princeton: Princeton University Press.Google Scholar