Wicksell's theoretical system based on marginalization theory and general equilibrium theory laid the main foundation for the development of modern neoclassical economics and occupied an important position in the history of western economics.
1893 published the first important monograph on economics, Value, Capital and Land Rent, which expounded the value of marginal utility school and related issues of distribution theory in mathematical language. 1898 Interest and Price, the most important masterpiece, has made the most unique contribution to the modern monetary interest theory and has the greatest influence on the modern western philosophy theory.
Wicksell's theory of commodity value is based on the theory of value source and the theory of price formation, the former is the basis of the latter, and the subjective theory of value is adopted, which excludes the possibility of other explanations of value source, namely, general utility theory, supply and demand theory combining relative scarcity with utility itself, production cost theory and labor theory of value. When analyzing the price, we distinguish between the relative price and the general price, and think that the change of the relative price is determined by natural reasons and cannot be completely controlled by human beings, while the change of the general price is a matter of standard selection and can be controlled by human beings. Therefore, it is advocated to maintain the stability of the overall price level without interfering with the relative price of commodities.
In monetary theory, he used to be Ricardo's monetary quantity theorist. He believes that money is only a means of exchange in circulation, it has no subjective value, and its subjective value is determined by the exchange value. There are many unpredictable things about the relationship between the price and quantity of money in real life. Therefore, he advocates the revised theory of money quantity, opposes the theory of money production cost, and thinks that the speed of money circulation and credit notes.
In the discussion of capital interest, Wicksell tried to unify jevons's concept of capital, Pam-Bavik's theory of time difference interest and Durham's theory of marginal productivity, so that his distribution theory had a unified form. His distribution theory is based on the traditional "three factors of production", the law of diminishing returns and complete free competition. Under this condition, the productivity of marginal workers (or marginal land), that is, what Wicksell called marginal productivity, determines the level of wages (or land rent). However, it must be pointed out that Pam-Bavik's theory of time difference interest attributes interest to the time difference of subjective evaluation, while Vicek attributes it to the productivity difference of labor and land at different times. Therefore, the form and connotation of both have changed. It can be seen that his capital interest theory is a mixture of capital productivity theory and marginal productivity theory, and its form is a variant of time difference interest theory.
Wicksell put forward the concept of natural interest rate corresponding to monetary interest rate, and pointed out that the latter occupies a major position in the relationship between them, which is the main reason that affects price changes. The difference between them affects economic activities and price changes, which is a very important conclusion.
Wicksell, in his works such as Interest and Price, analyzed the influence of the change of monetary profit rate and natural interest rate on the economy. If the monetary interest rate is lower than the natural interest rate, the marginal productivity of capital will increase, investment and production will expand, commodity demand will rise, and prices will rise. If the opposite happens, the economy will shrink, investment and production will shrink, the demand for goods will drop, and prices will fall; When the monetary profit is equal to the natural interest rate, the production price remains stable and the economy is in equilibrium. He believes that this kind of behavior is not limited to the immediate impact. Because of tradition and the law of inertia, it has the nature of "accumulation" and is later called "Wicksell accumulation process".
Wicksell pointed out in his book Interest and Price: If the monetary interest rate is equal to the natural interest rate, the demand for capital means that investment is equal to the supply of capital, that is, savings, prices are stable and the economy is in a state of balance. In an equilibrium state, the relative price and output of various products and the price and quantity of production factors will be determined by the physical field, that is, non-monetary factors, so money is neutral or neutral to the economic process, which is the so-called neutral monetary theory.
Wicksell is also an admirer of Malthus' population theory, and he once again put forward the concept of the most appropriate population. Wicksell opposed the dogma that the capitalist economy can automatically achieve equilibrium since Say, and put forward an economic stability policy with macro-monetary policy as the core, which had an important impact on western monetary theory and Keynesianism.