{"title":"The Wartime Fragments I","authors":"J. Toporowski","doi":"10.1093/oso/9780198816232.003.0003","DOIUrl":null,"url":null,"abstract":"While working in Cambridge and Oxford, Kalecki took issue with the Neo-Classical Wicksellian theory that the rate of interest determines the amount of investment in the economy. His studies showed only a weak effect of interest on business investment, in particular during recessions when firms were more likely to be operating with excess capacity. The short-term rate of interest would only affect velocity of circulation of money. But he also rejected Keynes’s idea that the long-term rate of interest could affect the amount of investment in the economy. Like Hawtrey, Hicks, and Shackle, Kalecki found that the long-term rate of interest does not vary much, and is therefore unlikely to be a causal factor in the business cycle.","PeriodicalId":313534,"journal":{"name":"Interest and Capital","volume":null,"pages":null},"PeriodicalIF":0.0000,"publicationDate":"2022-01-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Interest and Capital","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1093/oso/9780198816232.003.0003","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 0
Abstract
While working in Cambridge and Oxford, Kalecki took issue with the Neo-Classical Wicksellian theory that the rate of interest determines the amount of investment in the economy. His studies showed only a weak effect of interest on business investment, in particular during recessions when firms were more likely to be operating with excess capacity. The short-term rate of interest would only affect velocity of circulation of money. But he also rejected Keynes’s idea that the long-term rate of interest could affect the amount of investment in the economy. Like Hawtrey, Hicks, and Shackle, Kalecki found that the long-term rate of interest does not vary much, and is therefore unlikely to be a causal factor in the business cycle.