Knut Wicksell and Gustav Cassel on the Cumulative Process and the Price-Stabilizing Policy Rule
Year: 2003
Type: article
Abstract: 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.
Author: Thomas M. Humphrey
Institutions: Federal Reserve, Federal Reserve Bank of Richmond
Language: English
Topic: Economic Theory and Policy
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2114473706