A Critique of the Orthodox Interpretation

Guglielmo Chiodi
Additional contact information
Guglielmo Chiodi: University of Perugia

Chapter 6 in Wicksell’s Monetary Theory, 1991, pp 87-93 from Palgrave Macmillan

Abstract: Abstract In Wicksell’s ‘scientific programme’ a vision of the economic system seems to emerge which precludes reading economic phenomena either in terms of ‘equilibrium’ or as a mere transitory phase; this should be understood in the sense that these phenomena can neither possess any precise meaning nor operate in unequivocal direction without at the same time making reference to the institutional and political relationships existing in the economic system considered. So the money rate of interest, for example, is not the outcome of ‘free play’ between demand and supply — as it would be in a primitive system of exchange taking place among individuals; it it fixed by the banks. The fact that the latter may afterwards change their decision is both possible and probable; this, however, will essentially depend upon ‘external conditions’ (Wicksell, 1906, p. 461), certainly not on automatic mechanisms already contained inside the system. There emerges then a new attitude towards economic problems. The kernel made up by the set of ‘economic relationships’ seems to be broken by the introduction of ‘power relationships’. This remark is of a crucial importance not only for Wicksell’s monetary theory but also for economic theory in general.

Keywords: Economic System; Banking System; Natural Rate; Equilibrium Path; Theoretical Scheme (search for similar items in EconPapers)
Date: 1991
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-12155-7_6

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349121557

DOI: 10.1007/978-1-349-12155-7_6

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().