"The Influence of the Rate of Interest on Prices"

Knut Wicksell
Wicksell, Knut
(1851-1926)
BIO
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Card Catalog Information
First Pub. Date
1906
Publisher
Economic Journal XVII, pp. 213-220
Pub. Date
1907
Comments
A paper read before the Economic Section of the British Association, 1906.
Copyright
The text of this edition is in the public domain. Picture of Knut Wicksell: Detail from file photo, Liberty Fund, Inc.
About this Selected Essay Reprint

The thesis which I humbly submit to criticism is this. If, other things remaining the same, the leading banks of the world were to lower their rate of interest, say 1 per cent. below its ordinary level, and keep it so for some years, then the prices of all commodities would rise and rise and rise without any limit whatever; on the contrary, if the leading banks were to raise their rate of interest, say 1 per cent. above its normal level, and keep it so for some years, then all prices would fall and fall and fall without any limit except Zero.... [From "The Influence of the Rate of Interest on Prices"]