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Knut Wicksell taught at the University of Lund until his retirement in 1916. He was a Swedish economist whose work led to the widespread use of the word "natural" to explain the long-run equilibrium rate of interest. Wicksell had a tremendous influe nce on economist James M. Buchanan. According to Buchanan, his theory of public choice "was an almost natural consequence of my absorption of the Wicksellian message," which stated that economists must cease acting as if government were a benevolent despot.

Wicksell was a Malthusian and a strong advocate of birth control. He spoke out on moral issues quite often. He is best known for his work in "Interest and Prices", in which he laid out his version of the quantity theory of money. His version wa s different from the standard view at that time in that he looked at the indirect effect that the money supply has on prices.

Wicksell also elaborated on the theory of marginal productivity, which states that the payment to each factor of production equals that factors marginal productivity. He also stated that an efficient allocation of resources does not guarantee equitable distribution, because the preexisting distribution of income determines what form this allocation will take, and the preexisting distributionof income is not always just. The Stockholm School developed its own version of macroeconomics, which was based on Wicksell's work on quantity and price theory.

Works by Knut Wicksell:

• Lectures on Political Economy