ABSTRACT
In Keynes's lifetime of inexorable success, his Treatise on Money, his only work to go beyond one volume, was the grand exception. Knut Wicksell's doubled relation, investment-saving/natural interest rate-market interest rate was the armature around which the theorist Keynes wound the elaborations of his Treatise on Money. Keynes the policymaker, meanwhile, was placing more and more emphasis on low interest rates to encourage business investment and so increase production and employment. Keynes was building upon the work of Wickseil, the great Swedish economist and contemporary of Marshall seeing stable prices as basic to economic stability, Wicksell concentrated on the investment-saving relation, subject of his brief book, Interest and Prices. In the Tract on Monetary Reform, one may recall, Keynes had satirized comparative statics, the method employed by the quantity theory, which permitted believing economists "only tell that when the storm is long past the ocean is flat again."
