Johan Gustav Knut Wicksell, 1851-1926, was a Swedish economist and Professor at Lund University. He is considered one of the most important founders of the school of Stockholm.
In his most influential contribution, “Interest and Prices”, 1898, Wicksell made the differentiation between the natural rate of interest and the money rate of interest. The former was the interest rate that was neutral to prices in the real market, that is, at which equilibrium between supply and demand was found in the real market, and the latter was the interest rate in the capital market. This notion would be used by Milton Friedman when formulating the natural rate of unemployment.Wicksell carried out a remarkable synthesis of other economist works. In his “Value, Capital and Rent”, 1893, he used marginal utility, the marginal productivity theory of William S. Jevons, Carl Menger and Alfred Marshall and he combined it with Böhm-Bawerk’s analysis of capital. He then fused the result in a Walrasian comparative static general equilibrium framework, by which he became the father of the marginal productivity theory of distribution.
In many aspects, Wisksell is considered to be a precursor of J. M. Keynes, especially regarding his emphasis towards the role of the levels of saving and investment in the cumulative process of expansion and contraction of the economy.