Abstract
This essay argues that Knut Wicksell's trade cycle theory was an older version of real business cycle theory. Wicksell and modern real business cycle theorists both view technology shocks as the initial cause of business cycles. They also both explain money-income correlations as examples of reverse causality. However, Wicksell's analysis of credit market disequilibrium serving as a 'propagation mechanism' in his theory differentiates his analysis from that of modern real business cycle theory. Copyright 1993 by Scottish Economic Society.
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