What do you think?
Rate this book
Interest and Prices - A Study of the Causes Regulating the Value of Money
This antiquarian volume contains a fascinating treatise on interest-rates and prices in the late nineteenth century. Containing a wealth of interesting historic information on the state of the economy at this pivotal point in history, this is a text that will be of much value to those with an interest in the history and development of the modern economy, and is not to be missed by collectors of such literature. The chapters of this book include: 'Purchasing Power of Money and Average Prices', 'Relative Prices and Money Prices', 'The So-Called Cost of Production Theory of Money', 'The Quantity Theory and its Opponents', 'The Velocity of Circulation of Money', 'The Rate of Interest as Regulator of Commodity Prices', etcetera. This antiquarian book is being republished now in an affordable, modern edition complete with a new prefatory biography of the author. 'Interest and Prices' was first published in 1898.
252 pages, Kindle Edition
Published March 23, 2011
6 people are currently reading
112 people want to read
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 of 1 review
April 24, 2020
Knut Wicksell's insight of a possible divergence between the contractual and natural rates of interest eventually paved the way for the development of a robust theory of the business cycle in the Misesian branch of the Austrian tradition. However, some technical difficulties emerge from Wicksell's exposition of his cumulative process in chapter IX.
First, the lower order good market clearing only after the market for the factors of production is a specious proposition. Drawing from the work of Fetter (and, implicitly, from Turgot), prices of the factors of production represent the capitalized future stream of the marginal revenue product, which invariably requires a market-clearing price for the final good.
Second, it appears there are two distinct pricing dynamics: a classical mechanism— supply and demand adjust to produce a market-clearing price— between the owners of factors of production and capitalists/dealers and a subsequent fixed-price, predicated on the former, between dealers and entrepreneurs. If one indeed allows for competitive pricing in both moments, entrepreneurs are unable to earn profits in kind, and the cumulative process becomes infeasible.
Finally, Wicksell neglects the impact of "forced savings" arising from an exogenous increase in productivity on capital accumulation, depressing the natural rate of interest without procurement of the regulator of money prices.
IP still holds tremendous importance today for anyone aiming to think more clearly about the purchasing power of money.
First, the lower order good market clearing only after the market for the factors of production is a specious proposition. Drawing from the work of Fetter (and, implicitly, from Turgot), prices of the factors of production represent the capitalized future stream of the marginal revenue product, which invariably requires a market-clearing price for the final good.
Second, it appears there are two distinct pricing dynamics: a classical mechanism— supply and demand adjust to produce a market-clearing price— between the owners of factors of production and capitalists/dealers and a subsequent fixed-price, predicated on the former, between dealers and entrepreneurs. If one indeed allows for competitive pricing in both moments, entrepreneurs are unable to earn profits in kind, and the cumulative process becomes infeasible.
Finally, Wicksell neglects the impact of "forced savings" arising from an exogenous increase in productivity on capital accumulation, depressing the natural rate of interest without procurement of the regulator of money prices.
IP still holds tremendous importance today for anyone aiming to think more clearly about the purchasing power of money.
Displaying 1 of 1 review