Exonerating Wicksell:

James Ahiakpor correctly identifies classical writers as the true originators of the cumulative process analysis usually attributed to Knut Wicksell. Ahiakpor fails, however, to dislodge Wicksell from his place in the pantheon of monetary theorists. Wicksell contributed at least five innovations that advanced the cumulative process model far beyond its classical prototype.     

A Celebration of Hayek

For much of his career, the work of the Austrian economist F. A. Hayek was neglected by all but a small band of academics. The award of the Nobel Prize in Economic Science in 1974 at last brought public recognition to a scholar whose seven decades of work is increasingly seen to offer seminal analysis which will guide the development of economics for at least as long again in the future. Norman Barry, Professor of Politics at the University of Buckingham, examines Hayek's distinguished career.     

Currency options: Hayek and competing currencies

While monetary theory indicates the advantages of a single currency, there are compelling arguments for the UK to remain outside the euro-zone.     

Estimating the Weight Undersize Distribution for the Wicksell problem

In Wicksell's corpuscle problem one is interested in estimating the distribution of sphere diameters from the diameters of circle profiles obtained by a random section of the body containing the sphericle particles. The problem is known to be an ill posed inverse problem. Several regularization techniques have been applied to find solutions. We will review some of these in this article. In practical situations one often is more interested in the distribution of weight rather than the distribution of diameters. In estimating the weight undersite distribution similar problems are encountered. We will consider an estimator that is obtained by smoothing the distribution function of the circle diameters locally. It will be shown how the bandwidth must be chosen to obtain consistency and mean square error optirnality. Also asymptotic normality will be shown.     

Hayek Too Lenient on Socialist Calculation

Professor Hayek( JEA 2.3) allowed that collectivist planning, although practically impossible, could conceivable work in theory . Andrew Melnyk shows that Ludwig von Mises had demonstrated in 1949 that it is just as impossible in theory as in practice.     

On the Analytics of Wicksell: A Comment on Abiakpor

Three essential concepts of Wicksell's contributions are probed. (1) Wicksell's commingling of a barter economy with a money economy led to a logical pitfall in his cumulative-process paradigm. (2) Wicksell sought to deduce a cumulative process involving price-level movements from an economy without money and, therefore, without a general price level. (3) Wicksell's idealized pure credit system can be logically reconciled with his law of the demand for money creating its own supply.     

Keeping Land in Capital Theory: Ricardo, Faustmann, Wicksell, and George

A bstract .   Most economists today live in a two-factor world: There is just labor and capital. Land, so central to classical political economy, has been swallowed into capital and "disappeared." This paper surveys some of the better historical treatments of land and capital, their interrelations, and how they support modern Georgists and Greens who want land to reappear.     

Open Society: Hayek vs. Popper?

Does an open open society require a free market? Dr Naomi Moldoisky of the University of Melbourne reinforces Hayek's insistence that free societies must rest on free markets.     

Hayek on Capitalism and Socialism – A Scholar for All Seasons

Arthur Seldon, consultant editor of Economic Affairs and Vice-President of the IEA, reviews Hayek's latest book , The Fatal Conceit.     

Wicksell on the Classical Theories of Money, Credit, Interest and the Price Level:

ABSTRACT Knut Wicksell occupies a significant place in the history of monetary economics as the developer of the cumulative process by which deviations between the market and natural rates of interest cause the price level to change persistently. A more accurate version of the same argument is a part of classical monetary analysis but there the process originates from a change in base money or central bank credit while Wicksell's version may be initiated by banks capriciously setting their lending rates. Wicksell's version arises from his difficulties in correctly interpreting the classical quantity theory of money and interest rate determination from Hume down to Marshall, but has not been so noted in the literature.     

The Evolution of the Sophisticated Quantity Theory: Marshall vs.Wicksell on Transaction Demand

When the money supply increased exogenously, Marshall's vs. Wicksell's versions of short run inflation transmission are shown to be different because of their ideas on money demand. During the approach to monetary equilibrium, the implication was that the demand for transactions cash balances would have to increase in order for inflation to stop. Marshall focused on the real, while Wicksell focused on the nominal, demand for such balances; Marshall assumed velocity of money was constant, while Wicksell assumed it to be pro-cyclic. These assumptions about money demand caused them to make different predictions on how much prices would eventually rise: Marshall described a price-undershoot, while Wicksell described a price-overshoot mechanism.     

Knut Wicksell and the Classical Economists on Money, Credit, Interest and Price Level: A Comment on Ahiakpor

ABSTRACT This is an invited response to James C. W. Ahiakpor, Wicksell on the Classical Theories on Money, Credit, Interest and the Price Level. American Journal of Economics and Sociology 58 (July); 435-457. Wicksell's contribution was to introduce Böhm-Bawerk's theory of capital into a monetary setting.     

Money, Banking and Dynamics: Two Wicksellian Routes from Mises to Hayek and Schumpeter

This paper examines and compares, in both historical and theoretical perspectives, Hayek's and Schumpeter's accounts of the role played by banks and credit in their respective explanations of business cycles. The first section is focused on the common inheritance of these two authors, which can be traced back to Wicksell, going from Mises whose Theory of Money and Credit provides, as we shall see, a crucial link in this perspective. The following two sections deal with Hayek's and Schumpeter's respective accounts as well as critical reconstruction of this tradition. A close examination of their respective treatments of the banking system and its effects on economic productive structures then allows us to see in a new light the theoretical question of the impact of credit on economic dynamics and its related policy proposals. The last section is dedicated to a comparison between Hayek's and Schumpeter's views of the dynamics of monetary economies and their corresponding policy issues.