Monetary Policy in the Nordic Countries during the Classical Gold Standard Period: The Wicksellian View

Abstract

In his article ‘The Influence of the Rate of Interest on Prices’, Economic Journal XVII (1907), Knut Wicksell argued that the variations in price level during the classical gold standard were not primarily due to variations in gold supply but, rather, to the interest rate policies followed by the central banks (i.e. discount rate adjustment), and the real disturbances affecting the natural rate of interest. According to Wicksell, price stability required keeping the interest rate controlled by the central bank in line with the natural rate of interest determined by factors outside the control of the central bank.KeywordsInterest RateMonetary PolicyMoney SupplyMoney DemandNominal Interest RateThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.