ABSTRACT
Bohm-Bawerk'stheorywouldhavebeeninneedofimprovementinmany respectsevenifnoobjectionsofalogicalnaturehadtoberaisedagainst it.Inthefirstplace,ithadtobebroughtclosertorealitybydroppingthe restrictiveassumptionsthatonlyonekindofgoodisbeingproducedand thatonlyonefactorofproductionisbeingused.Thisexpansionofthe theorywascontributedbyWicksellinhisfirstworkdealingwiththe problemofcapital.lHowever,Wicksellheldontotheassumptionthat onlyworkingcapitalisusedintheproductionprocess.Healsocontinued tocalculateintermsofsimpleinterestandtoemploytheconceptofthe averageperiodofproduction.LetusnowconsiderWicksell'sfirstcontributiontothetheoryofinterest.
