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Encyclopedia > Knut Wicksell
Knut Wicksell, Swedish economist
Knut Wicksell, Swedish economist

Johan Gustaf Knut Wicksell, (December 20, 1851 Stockholm -May 3, 1926 Stocksund ) was a Swedish economist. Download high resolution version (574x608, 30 KB) This image is in the public domain because its copyright has expired in the United States and those countries with a copyright term of life of the author plus 100 years. ... Download high resolution version (574x608, 30 KB) This image is in the public domain because its copyright has expired in the United States and those countries with a copyright term of life of the author plus 100 years. ... December 20 is the 354th day of the year (355th in leap years) in the Gregorian calendar. ... 1851 (MDCCCLI) was a common year starting on Wednesday (see link for calendar) of the Gregorian calendar (or a common year starting on Friday of the 12-day-slower Julian calendar). ... May 3 is the 123rd day of the year in the Gregorian calendar (124th in leap years). ... Year 1926 (MCMXXVI) was a common year starting on Friday (link will display the full calendar). ... Alan Greenspan, former chairman, United States Federal Reserve. ...


Wicksell was born in Stockholm, Sweden on December 20, 1851. His father was a relatively successful businessman and real estate broker. He lost both his parents at a relatively young age - his mother died when he was only six years old, and his father died when he was fifteen. His father's considerable estate allowed the now fatherless child to enroll at the University of Uppsala in 1869 to study mathematics and physics. He received his first degree in two years, but continued in graduate studies until 1885 when he received his doctorate in mathematics. In 1887, Wicksell received a scholarship to study on the continent where he heard lectures by the economist Carl Menger in Vienna. In the following years, his interests began to shift toward the social sciences, and in particular, economics.   (IPA: ; UN/LOCODE: SE STO) is the capital of Sweden, and consequently the site of its Government and Parliament as well as the residence of the Swedish head of state, King Carl XVI Gustaf. ... December 20 is the 354th day of the year (355th in leap years) in the Gregorian calendar. ... 1851 (MDCCCLI) was a common year starting on Wednesday (see link for calendar) of the Gregorian calendar (or a common year starting on Friday of the 12-day-slower Julian calendar). ... Uppsala University Uppsala University (Swedish Uppsala universitet) is a public university in Uppsala, Sweden. ... 1869 (MDCCCLXIX) is a common year starting on Friday (link will take you to calendar) of the Gregorian calendar or a common year starting on Sunday of the 12-day-slower Julian calendar. ... Euclid, Greek mathematician, 3rd century BC, as imagined by by Raphael in this detail from The School of Athens. ... Physics (Greek: (phúsis), nature and (phusiké), knowledge of nature) is the science concerned with the discovery and understanding of the fundamental laws which govern matter, energy, space, and time and explaining them using mathematics. ... 1885 (MDCCCLXXXV) is a common year starting on Thursday of the Gregorian calendar (or a common year starting on Saturday of the 12-day slower Julian calendar). ... 1887 (MDCCCLXXXVII) is a common year starting on Saturday (click on link for calendar) of the Gregorian calendar or a common year starting on Monday of the Julian calendar. ... Austrian School economist Carl Menger Carl Menger Carl Menger (February 28, 1840 – February 26, 1921) was the founder of the Austrian School of economics. ... Vienna (German: , see also other names) is the capital of Austria, and also one of the nine States of Austria. ...


As a lecturer at Uppsala, Wicksell had attracted attention for his opinions about labor. At one lecture, he condemned drunkenness and prostitution as alienating, degrading, and impoverishing. Although he was sometimes identified as a socialist, his solution to the above problem was decidedly Malthusian in advocating birth control - a theory he would defend to the end of his life. Although he had attracted some attention for his fiery ideas, his first work in economics, Value, Capital and Rent, published in 1892, was largely unnoticed. In 1896, he published Studies in the theory of Public Finance, applying the ideas of marginalism to progressive taxation, public goods, and other aspects of public policy, attracting considerably more interest. Socialism is a social and economic system (or the political philosophy advocating such a system) in which the economic means of production are owned and controlled collectively by the people. ... The Rev. ... 1892 (MDCCCXCII) was a leap year starting on Friday (see link for calendar). ... Year 1896 (MDCCCXCVI) was a leap year starting on Wednesday (link will display calendar). ... Marginalism is the use of marginal concepts within economics. ...


Wicksell had taken a common-law wife, Anna Bugge, in 1887, although he found it difficult to support his family on his irregular positions and publications. Economics in Sweden at the time was taught as part of the law school and Wicksell was unable to gain a chair as a professor until he was awarded a law degree. He returned to the University of Uppsala where he completed a four-year law degree in two years, and subsequently became an associate professor at that university in 1899. The next year, he became a full professor at Lund University, where he would endeavor in his most influential work. Anna Wicksell Bugge (born in Egersund, Norway, 1862, died 1928) was a Norwegian feminist. ... 1887 (MDCCCLXXXVII) is a common year starting on Saturday (click on link for calendar) of the Gregorian calendar or a common year starting on Monday of the Julian calendar. ... Year 1899 (MDCCCXCIX) was a common year starting on Sunday (link will display the full calendar). ... Lund University main building, from 1882 by Helgo Zettervall. ...


After a lecture in 1908 satirizing the Immaculate Conception, Wicksell was briefly imprisoned for two months. Eight years later, in 1916, Wicksell retired from his post at Lund and took a position at Stockholm advising the government on financial and banking issues. In Stockholm, Wicksell associated himself with other future great economists of the so-called "Stockholm School," such as Bertil Ohlin and Gunnar Myrdal. He also taught a young Dag Hammarskjöld, the future Secretary-General of the United Nations. 1908 (MCMVIII) was a leap year starting on Wednesday (link will take you to calendar). ... Mary, mother of Jesus as the Immaculate Conception. ... Year 1916 (MCMXVI) was a leap year starting on Saturday (link will display the full calendar). ... The Stockholm School, or Stockholmsskolan, is a school of economic thought. ... Bertil Ohlin (April 23, 1899 – August 3, 1979), was a Swedish economist and winner of the 1977 Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. ... Gunnar Myrdal (December 6, 1898 – May 17, 1987) was a Swedish economist and politician. ... Dag Hjalmar Agne Carl Hammarskjöld ( ) (July 29, 1905 – September 18, 1961) was a Swedish diplomat and the second Secretary-General of the United Nations. ... The United Nations Secretary-General is the head of the Secretariat, one of the principal divisions of the United Nations. ...


Wicksell died in 1926 while writing a final work on the theory of interest. Elements of his public policy were taken strongly to heart by the Swedish government, including his vision of a limited welfare state. Wicksell's contributions to economics have been described by some economists, including historian-of-economics Mark Blaug, as fundamental to modern macroeconomics. Year 1926 (MCMXXVI) was a common year starting on Friday (link will display the full calendar). ... It has been suggested that Welfare capitalism be merged into this article or section. ... The term economics was coined around 1870 and popularized by Alfred Marshall, as a substitute for the earlier term political economy which has been used through the 18th-19th centuries, with Adam Smith, David Ricardo and Karl Marx as its main thinkers and which today is frequently referred to as... Mark Blaug (April 3,1927, the Hague, Netherlands -) is a British economist, who has covered a broad range of topics over his long career. ... This article does not cite its references or sources. ...

Contents

Theoretical contributions

Wicksell was enamored with the theory of Léon Walras (the Lausanne school), Eugen von Böhm-Bawerk (the Austrian school), and David Ricardo, and sought a synthesis of the three theoretical visions of the economy. Wicksell's work on creating a synthetic economic theory earned him a reputation as an "economist's economist." For instance, although the marginal productivity theory - the idea that payments to factors of production equilibrate to their marginal productivity - had been laid out by others such as John Bates Clark, Wicksell presented a far simpler and more robust demonstration of the principle, and much of the present conception of that theory stems from Wicksell's model. Marie-Ésprit-Léon Walras (December 16, 1834 in Évreux, France - January 5, 1910 in Clarens, near Montreux, Switzerland) was a French economist, considered by Joseph Schumpeter as the greatest of all economists. He was a mathematical economist associated with the creation of the general equilibrium theory. ... --Duk 06:58, 18 August 2005 (UTC) Categories: Possible copyright violations ... Eugen von Böhm-Bawerk Eugen von Böhm-Bawerk (February 12, 1851 – August 27, 1914) made important contributions to the development of Austrian economics. ... The Austrian School, also known as “the Vienna School” and as “the Psychological School”, is a school of economic thought that advocates the adherence to strict methodological individualism. ... David Ricardo (April 18, 1772 – September 11, 1823), a political economist, is often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, and Adam Smith. ... Factors of production are resources used in the production of goods and services in economics. ... John Bates Clark John Bates Clark (26 January 1847 – 21 March 1938) was an American neo-classical economist. ...


Extending from Ricardo's investigation of income distribution, Wicksell concluded that even a totally unfettered economy was not destined to equalize wealth as a number of Wicksell's predecessors had predicted. Instead, Wicksell posited, wealth created by growth would be distributed to those who had wealth in the first place. From this, and from theories of marginalism, Wicksell defended a place for government intervention to improve national welfare. Marginalism is the use of marginal concepts within economics. ...


Wicksell's most influential contribution was his theory of interest, published in his 1898 work, Interest and Prices. He made a key distinction between the natural rate of interest and the money rate of interest. The money rate of interest, to Wicksell, was merely the interest rate seen in the capital market; the natural rate of interest was the interest rate that was neutral to prices in the real market, or rather, the interest rate at which supply and demand in the real market was at equilibrium - as though there were no need for capital markets. This connected to the theory of the Austrian School, which theorized that an economic boom happened when the natural rate of interest was higher than the market rate. 1898 (MDCCCXCVIII) was a common year starting on Saturday (see link for calendar) of the Gregorian calendar (or a common year starting on Monday of the 12-day-slower Julian calendar). ... The capital market (securities markets)is the market for securities, where companies and the government can raise long-term funds. ... The supply and demand model describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). ... The Austrian School, also known as “the Vienna School” and as “the Psychological School”, is a school of economic thought that advocates the adherence to strict methodological individualism. ... In economics, the term boom and bust refers to the movement of an economy through economic cycles due to changes in aggregate demand. ...


This contribution, called the "cumulative process," implied that if the natural rate of interest was not equal to the market rate, demand for investment and quantity of savings would not be equal. If the market rate is beneath the natural rate, an economic expansion occurs, and prices, ceteris paribus, will rise. Ceteris paribus is a Latin phrase, literally translated as with other things [being] the same, and usually rendered in English as all other things being equal. ...


This idea would be expanded upon by the Austrian school, which used it to form a theory of the business cycle based on central bank policy - changes in the level of money in the economy would shift the market rate of exchange in some way relative to the natural rate, and thus trigger a change in economic growth. The cumulative process was the leading theory of the business cycle until John Maynard Keynes' The General Theory of Employment, Interest, and Money. Wicksell's theory would be a strong influence in Keynes's ideas of growth and recession, and also in Joseph Schumpeter's "creative destruction" theory of the business cycle. The Austrian School, also known as “the Vienna School” and as “the Psychological School”, is a school of economic thought that advocates the adherence to strict methodological individualism. ... // [edit] Introduction [edit] Definition If we were to take snapshots of an economy at different points in time, no two photos would look alike. ... John Maynard Keynes (right) and Harry Dexter White at the Bretton Woods Conference John Maynard Keynes, 1st Baron Keynes, CB (pronounced keyns, IPA ) (5 June 1883 – 21 April 1946) was a British economist whose ideas, called Keynesian economics, had a major impact on modern economic and political theory as well... The current version of the article or section reads like an advertisement. ... Joseph Schumpeter Joseph Alois Schumpeter (February 8, 1883 – January 8, 1950) was an economist from Austria and an influential political scientist. ... Creative destruction, introduced in 1942 by the economist Joseph Schumpeter, describes the process of industrial transformation that accompanies radical innovation. ...


Wicksell's main intellectual rival was the American economist Irving Fisher, who espoused a more succinct explanation of the quantity theory of money, resting it almost exclusively on long run prices. Wicksell's theory was considerably more complicated, beginning with interest rates in a system of changes in the real economy. Although both economists concluded from their theories that at the heart of the business cycle (and economic crisis) was government monetary policy, their disagreement would not be solved in their lifetimes, and indeed, it was inherited by the policy debates between the Keynesians and monetarists beginning a half-century later. Irving Fisher (February 27, 1867 Saugerties, New York — April 29, 1947, New York) was an American economist, health campaigner, and eugenicist. ... In economics, the velocity of money refers to a key term in the quantity theory of money, which centers on the equation of exchange: where is the total amount of money in circulation in an economy at any one time (say, on average during a month). ... In economic models, the long run time frame assumes no fixed factors of production. ... Keynesian economics, or Keynesianism, is an economic theory based on the ideas of John Maynard Keynes, as put forward in his book The General Theory of Employment, Interest and Money, published in 1936 in response to the Great Depression of the 1930s. ... Monetarism is a set of views concerning the determination of national income and monetary economics. ...


Economists influenced by Knut Wicksell

John Maynard Keynes (right) and Harry Dexter White at the Bretton Woods Conference John Maynard Keynes, 1st Baron Keynes, CB (pronounced keyns, IPA ) (5 June 1883 – 21 April 1946) was a British economist whose ideas, called Keynesian economics, had a major impact on modern economic and political theory as well... Friedrich August von Hayek, CH (May 8, 1899 in Vienna – March 23, 1992 in Freiburg) was an Austrian-born British economist and political philosopher known for his defense of liberal democracy and free-market capitalism against socialist and collectivist thought in the mid-20th century. ... Sir Dennis Holme Robertson (May 23, 1890-April 21, 1963) was an English economist who taught at Cambridge and London Universities. ... Gunnar Myrdal (December 6, 1898 – May 17, 1987) was a Swedish economist and politician. ... Ludwig Heinrich Edler von Mises (September 29, 1881 – October 10, 1973) was a notable economist and a major influence on the modern libertarian movement. ... Karl Gustav Cassel (born October 20, 1866) was a Swedish economist and was Professor of Economics at the University of Stockholm, Sweden. ... Erik R. Lindahl (1891-1960) was an Swedish economist. ... Eli Filip Heckscher (Stockholm November 24, 1879 - Stockholm December 23, 1952) was a Swedish political economist and economic historian. ... Bertil Ohlin (April 23, 1899 – August 3, 1979), was a Swedish economist and winner of the 1977 Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. ...

Schools of thought influenced by Knut Wicksell

Keynesian economics, or Keynesianism, is an economic theory based on the ideas of John Maynard Keynes, as put forward in his book The General Theory of Employment, Interest and Money, published in 1936 in response to the Great Depression of the 1930s. ... John Maynard Keynes provided the framework for synthesizing a host of economic ideas present between 1900 and 1940, and that synthesis bears his name. ... Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ... Monetarism is a set of views concerning the determination of national income and monetary economics. ... The Austrian School, also known as “the Vienna School” and as “the Psychological School”, is a school of economic thought that advocates the adherence to strict methodological individualism. ... The Stockholm School of Economics or Handelshögskolan is a business school and private university in Stockholm, Sweden. ...

References

External links


  Results from FactBites:
 
Knut Wicksell, Biography: The Concise Encyclopedia of Economics: Library of Economics and Liberty (738 words)
Economist Knut Wicksell made his name among the Swedish public with a series of provocative lectures on the causes of prostitution, drunkenness, poverty, and overpopulation.
Wicksell also emphasized that an efficient allocation of resources is not necessarily just, because the allocation depends crucially on the preexisting distribution of income, and nothing guarantees that this preexisting distribution is just.
By 1890 Wicksell had returned to Stockholm, but being "too notorious" and unqualified to teach—he held degrees in mathematics, but economics instructors were then required to have formal degrees in law and economics—he returned to free-lance writing and lecturing.
Knut Wicksell - Wikipedia, the free encyclopedia (898 words)
Wicksell was born in Stockholm, Sweden on December 20, 1851.
Wicksell was enamored with the theory of Léon Walras (the Lausanne school), Eugen von Böhm-Bawerk (the Austrian school), and David Ricardo, and sought a synthesis of the three theoretical visions of the economy.
Wicksell's theory would be a strong influence in Keynes's ideas of growth and recession, and also in Joseph Schumpeter's "creative destruction" theory of the business cycle.
  More results at FactBites »

 
 

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