IDEAS home Printed from https://ideas.repec.org/a/taf/eujhet/v5y1998i1p140-168.html
   My bibliography  Save this article

Wicksell, Ramsey and the theory of interest

Author

Listed:
  • Mauro Boianovsky

Abstract

The article discusses Wicksell's assessment of the controversy between Bohm-Bawerk on one side, and Fisher and Bortkiewicz on the other, on the role of productivity (the 'third reason') in the determination of the rate of interest. It is shown that in the process of arguing out the third reason Wicksell came remarkably close to Frank Ramsey's view of the determinants of saving in economies with a positive subjective rate of discount. The similarities between Wicksell and Ramsey result from the fact that - in contrast with Fisher and Bohm-Bewerk - they assumed reinvestment, with the corollary that maximum permanent consumption will be reached at zero interest if the subjective rate discount of future utility is zero. Wicksell used his Ramsey-like saving rule to explain the interaction betwen Bohm-Bawerk's three reasons in either dynamic or stationary conditions, which enabled him to reformulate the third reason as the 'marginal productivity of waiting'. Finally, the relevance of Wicksell's savings rule for the perennial debate on 'Wicksell's missing equation' is considered in the last section of the article.

Suggested Citation

  • Mauro Boianovsky, 1998. "Wicksell, Ramsey and the theory of interest," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 5(1), pages 140-168.
    • Handle: RePEc:taf:eujhet:v:5:y:1998:i:1:p:140-168
    DOI: 10.1080/10427719800000006
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/10427719800000006
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10427719800000006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Klaus H. Hennings & Heinz D. Kurz, 1997. "The Austrian Theory of Value and Capital," Books, Edward Elgar Publishing, number 839.
    2. Joan Robinson, 1953. "The Production Function and the Theory of Capital," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 21(2), pages 81-106.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Boianovsky, Mauro & Trautwein, Hans-Michael, 2001. "Wicksell's lecture notes on economic crises (1902/05)," Structural Change and Economic Dynamics, Elsevier, vol. 12(3), pages 343-366, September.
    2. Marion Gaspard, 2005. "Individual Behaviors and Collective Welfare: Ramsey's " microfoundations " of " macro-equilibrium "," Post-Print halshs-01162036, HAL.
    3. Mauro BoianovskyBy, 2017. "Optimum saving and growth: Harrod on dynamic welfare economics," Oxford Economic Papers, Oxford University Press, vol. 69(4), pages 1120-1137.
    4. Francis E. Raymond, 2024. "Connecting Classical and Early Neoclassical Views on Savings and Capital Formation to Modern Growth Theory Through the Lens of F. P. Ramsey," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 50(1), pages 54-78, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mazouch, P. & Krejčí, I., 2016. "The Analysis of the Age Structure of Regional Fixed Capital in the Agriculture," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 8(2), pages 1-13, June.
    2. Jaime Páez Méndez, 2013. "Las contribuciones de Joan Robinson a la teoría económica y su vigencia," Documentos de Investigación - Economía 14058, Universidad Central.
    3. Moldaschl, Manfred, 2010. "Why innovation theories make no sense," Papers and Preprints of the Department of Innovation Research and Sustainable Resource Management 9/2010, Chemnitz University of Technology, Faculty of Economics and Business Administration.
    4. Giuseppe Fontana & Bill Gerrard, 2006. "The future of Post Keynesian economics," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 59(236), pages 49-80.
    5. Di Matteo, Massimo & Filippi, Francesco & Sordi, Serena, 2006. "`The confessions of an unrepentant model builder': Rummaging in Goodwin's Archive," Structural Change and Economic Dynamics, Elsevier, vol. 17(4), pages 400-414, December.
    6. Harvey Gram & Geoffrey Harcourt, 2015. "Joan Robinson and MIT," Working Papers 9, City University of New York Graduate Center, Ph.D. Program in Economics.
    7. Yara Zeineddine, 2021. "Institutional Aspects of Capital in Joan Robinson's 'Rules of the Game': Rentier versus Entrepreneurs in Managerial Capitalism," Working Papers hal-03230146, HAL.
    8. Fix, Blair, 2018. "The aggregation problem: Implications for ecological economics," Working Papers on Capital as Power 2018/03, Capital As Power - Toward a New Cosmology of Capitalism.
    9. Luigi L. Pasinetti, 2000. "Critique of the neoclassical theory of growth and distribution," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 53(215), pages 383-431.
    10. J. Barkley Rosser, 2020. "Austrian themes and the Cambridge capital theory controversies," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(4), pages 415-431, December.
    11. repec:hum:wpaper:sfb649dp2008-040 is not listed on IDEAS
    12. Blair Fix, 2021. "How the rich are different: hierarchical power as the basis of income size and class," Journal of Computational Social Science, Springer, vol. 4(2), pages 403-454, November.
    13. repec:hal:spmain:info:hdl:2441/4eus3ho3fk813p8qcqfc1gaft2 is not listed on IDEAS
    14. Hager, Sandy Brian, 2013. "Public Debt, Ownership and Power: The Political Economy of Distribution and Redistribution," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 157991, September.
    15. Carlo Milana, 2019. "Solving the Reswitching Paradox in the Sraffian Theory of Capital," Applied Economics and Finance, Redfame publishing, vol. 6(6), pages 97-125, November.
    16. Jesus Felipe & F. Gerard Adams, 2005. ""A Theory of Production" The Estimation of the Cobb-Douglas Function: A Retrospective View," Eastern Economic Journal, Eastern Economic Association, vol. 31(3), pages 427-445, Summer.
    17. Keshab Bhattarai, 2015. "Financial Deepening and Economic Growth in Advanced and Emerging Economies," Review of Development Economics, Wiley Blackwell, vol. 19(1), pages 178-195, February.
    18. Gracia, Eduard, 2011. "Uncertainty and capacity constraints: Reconsidering the aggregate production function," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 5, pages 1-50.
    19. Malte Faber & Ralph Winkler, 2006. "Heterogeneity and Time," American Journal of Economics and Sociology, Wiley Blackwell, vol. 65(3), pages 803-825, July.
    20. Fix, Blair, 2018. "The trouble with human capital theory," Working Papers on Capital as Power 2018/07, Capital As Power - Toward a New Cosmology of Capitalism.
    21. Guglielmo Chiodi, 2018. "Sraffa’s Silenced Revival of the Classical Economists and of Marx," Working Papers 4/18, Sapienza University of Rome, DISS.
    22. Theodore Mariolis & Lefteris Tsoulfidis, 2018. "Less Is More: Capital Theory And Almost Irregular-Uncontrollable Actual Economies," Contributions to Political Economy, Cambridge Political Economy Society, vol. 37(1), pages 65-88.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:eujhet:v:5:y:1998:i:1:p:140-168. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/REJH20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.