Economics Dictionary of ArgumentsHome
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| Wicksell Effect: The Wicksell Effect describes how changes in interest rates impact capital valuation and income distribution. It has two forms the price Wicksell Effect, where interest rate changes alter relative capital values, and the real Wicksell Effect, affecting capital intensity in production. It plays a key role in capital theory debates, including the Cambridge capital controversy. See also Interest rates, Joan Robinson, Capital structure, Capital, Production function._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Dictionary of Arguments. | |||
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Trevor W. Swan on Wicksell Effect - Dictionary of Arguments
Harcourt I 39 Wicksell effect/Swan/Harcourt: Wicksell demonstrated that an increase in social capital is partly 'absorbed by increased wages . . ., so that only the residue ... is really effective as far as a rise in production is concerned'. Swan: Swan is concerned to show in terms of Wicksell's own examples (the point-input-point-output case and the analysis of Ackerman's problem, see Swan [1956](1), pp. 352-61) that "the Wicksell Effect is nothing but an inventory revaluation' (p. 355). SwanVsRobinson: In establishing this point, he accused Joan Robinson of confusing the change in the value of a stock of capital with the value of the change, a charge which she understandably took rather amiss, see Robinson [1957](2), p. 107 n6. As Swan shows (see pp. 352-3) this implies that the marginal product of capital (in Wicksell's point-input-point-output case) is less than the rate of interest, an obstacle in the way of the acceptance of 'von Thünen's thesis' (which was its main interest to Wicksell). >Wicksell effect/Harcourt. 1. Swan, T. W. [1956] 'Economic Growth and Capital Accumulation', Economic Record, xxxn, pp. 334-61. 2. Robinson, J. [1957] 'Economic Growth and Capital Accumulation - A Comment', Economic Record, xxxm, pp. 103-8._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. "Vs" indicates differences in content, not necessarily the chronological progression of a controversy. If a German edition is specified, the page numbers refer to this edition. |
Swan I Trevor W. Swan Trevor Winchester Swan, Volume I: Life and Contribution to Economic Theory and Policy (Palgrave Studies in the History of Economic Thought) London 1922 Harcourt I Geoffrey C. Harcourt Some Cambridge controversies in the theory of capital Cambridge 1972 |
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