Wicksell effect

The Wicksell effect (Wicksell(1893, 1934)) is the combination of a price effect and a real effect on the valuation of changes in the capital stock. An important implication of the effect is that the valuation of the capital stock is extremely problematic in all realistic situations.[1][2] The price effect involves a reevalutaion of the inventory of capital goods due to new prices. The real effect due to the price weighted sum of changes in the physical quantities of different capital goods. The term itself was introduced by Uhr(1951) and its importance noted by both Joan Robinson(1956) and Trevor Swan(1956). [3][4][5][6]

See also

Cambridge capital controversy

References

  1. ^ Wicksell, K (1893) Value, Capital and rent
  2. ^ Wicksell, K (1934) Lectures on Political Economy
  3. ^ Uhr, C (1951) Knut Wicksel, a centennial evaluation, American Economic Review 41, December 829-60
  4. ^ Robinson, J (1956) The Accumulation of Capital
  5. ^ Swan, T (1956) Economic Growth and capital accumulation, Economic Record, 32, Nov 334-61
  6. ^ Burmesiter, E (1987) Wicksell effect, In The New Palgrave Dictionary of Economics, Eatwell et al (1987)