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John Stuart Mill and Wicksell’s cumulative process

Sotiropoulos, Dimitris (2008). John Stuart Mill and Wicksell’s cumulative process. Bulletin of Political Economy, 2(1) pp. 67–78.

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Abstract

This article deals with the particular connection between the cumulative process in the writings of Knut Wicksell and John Stuart Mill. Although, the idea of the cumulative process is mainly attributed to Thornton, Mill was the first to emphasize that the discrepancy between the market rate of interest and the expected yield of investment were the reason why the prices generally increased during the first stages of the business cycle. Thus, he stressed the crucial role of investment, regarding the cumulative process as a disequilibrium situation, in which the net investment is positive and constantly increasing as a result of future expectations for profits. The connection between Mill’s and Wicksell’s argumentations points out that the introduction of money and credit into a barter economy in no way serves to discredit Say’s Law.

Item Type: Journal Item
Copyright Holders: 2008 SPI
ISSN: 0973-5747
Academic Unit/School: Faculty of Business and Law (FBL) > Business > Department for Accounting and Finance
Faculty of Business and Law (FBL) > Business
Faculty of Business and Law (FBL)
Research Group: Innovation, Knowledge & Development research centre (IKD)
Item ID: 39297
Depositing User: Dimitris Sotiropoulos
Date Deposited: 22 Jan 2014 10:18
Last Modified: 01 May 2019 13:16
URI: http://oro.open.ac.uk/id/eprint/39297
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