Wicksell on the American Crisis of 1907

Boianovsky, Mauro

doi:10.2139/ssrn.1529642

Abstract

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Wicksell on the American Crisis of 1907

Mauro Boianovsky

Universidade de Brasilia

December 30, 2009

Journal of the History of Economic Thought, Vol. 33.2, 2011

Abstract:
The paper brings to light an article by Knut Wicksell published in Swedish in 1908 about the American crisis of 1907. Wicksell explicitly distinguished, apparently for the first time in the literature, three features of a healthy banking system: Solvency, liquidity, and versatility. The paper compares Wicksell's account of the 1907 crisis to the contemporary literature (Sprague, Fisher etc) and to Bagehot's classic approach to the working of the banking system in periods of instability. Wicksell emphasized the interaction between insolvency and illiquidity, and pointed out the key role of "versatility" in the form of macroeconomic stabilization policy.

Number of Pages in PDF File: 26

Keywords: 1907 American crisis, Knut Wicksell, solvency, liquidity, versatility

JEL Classification: B13, B31, N11, N21

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Date posted: December 30, 2009 ; Last revised: September 23, 2010

Suggested Citation

Boianovsky, Mauro, Wicksell on the American Crisis of 1907 (December 30, 2009). Journal of the History of Economic Thought, Vol. 33.2, 2011. Available at SSRN: http://ssrn.com/abstract=1529642 or http://dx.doi.org/10.2139/ssrn.1529642

Contact Information

Mauro Boianovsky (Contact Author)

Universidade de Brasilia ( email )

Brasilia, DF 70910-900
Brazil