II. CONTEXTUALIZING AN EARLY DRAFT OF INTEREST AND PRICES

Mauro and I met for the first time in 1997, not long after his return from Cambridge to Brasília. When I had an invitation to give a seminar at the Central Bank in Brasília, I took the opportunity to go to see that young scholar who evidently had a deep interest in Wicksell’s economics, like me.Footnote ⁴ In our first conversation at the restaurant Carpe Diem, Mauro wasted no time with small talk but went straight to the heart of the matter, checking the depth of my knowledge about Wicksell. We discovered quickly that we had similar views about the dividing lines in Wicksell’s treatment of economic dynamics and ambiguities in his notion of the natural rate of interest. We also found out that we had partly overlapping, partly complementary skills and background knowledge, offering the prospect of fruitful collaboration. The test case arrived a few weeks later in the form of an airmail envelope with the copy of a draft entitled “Der Bankzins als Regulator d. Warenpreise” (The bank rate of interest as the regulator of prices). It was handwritten by Wicksell in German and in Kurrent, an old cursive handwriting style. Mauro had found it in the Wicksell archives at the Lund University Library, sensed that it could shed new light on the making of Interest and Prices, and asked me to work with him on the translation and an introductory comment.

We did not meet in person over the following two years but corresponded intensively by letters and copies via airmail and faxes; it would take some time before Mauro was able and willing to communicate by email with attachments. Notwithstanding the lags and limitations of those old technologies, we found the project exciting. Wicksell’s manuscript was undated, but Torun Hedlund-Nyström, librarian at Lund from the 1940s to the 1970s, had scribbled “1889” on the cover without further explanation. We went about meticulous detective work on price index series and other contextual evidence, at the end of which we could establish that Wicksell had indeed written the draft in 1889, almost a decade before Geldzins und Güterpreise , the German original of Interest and Prices ([1898] Reference Wicksell1936), was published. We could also show that, while the short draft contained most of the core arguments expounded in the twenty-times-larger 1898 book, the context was significantly different and the content differed on at least two substantial points.

Wicksell had written the draft just after his return from a stay of two terms at the University of Berlin, where he had studied lectures and writings by the German Banking School (notably Erwin Nasse), and also “discovered” the newly published Positive Theory of Capital by Eugen von Böhm-Bawerk (1889). He had not yet fully worked out his own theory of capital and interest, as set forth in On Value, Capital and Rent ([1893] Reference Wicksell1954) and Lectures, I ([1901, 1911] Reference Wicksell1934). In the 1889 draft Wicksell characterized the “natural capital rate of interest” as the expected surplus of production in terms of commodities (on annual average). This definition is compatible with Wicksell’s 1898 notion of the natural rate as the interest rate that brings real investment in line with planned saving, but it does not postulate the natural rate to be the center of gravity for the cumulative process. The first point is thus that in 1889 Wicksell did not consider the natural rate to have any stabilizing force in itself; he defined it as the own rate of return on real investment, which is compared with the bank rate of interest.

This explains also the second point, Wicksell’s strong emphasis on the role of expectations in the formation of the price level and in the entrepreneurs’ calculation of the rate of return. In the 1889 draft Wicksell made it much clearer than in the 1898 book that profit expectations of the entrepreneurs in combination with an elastic credit supply (which reduces variations of the bank rate) play a prominent role in producing an indifferent (or neutral) equilibrium, that is, an instability of the price level in the sense that there is no force in the system to return it to its original position. These profit expectations need not fundamentally differ from the expectations that contribute to the stability of the equilibrium of relative prices. As a “practical conclusion” Wicksell in 1889 proposed to manage the expectations of the public by a “cooperative interest rate policy … of all central banks” that would replace the protection of gold reserves by the sole objective of keeping the value of money stable.

The two substantial points on which Wicksell’s 1889 draft differed from his 1898 book were the main findings in our comment that was published in HOPE (History of Political Economy), along with the translation of Wicksell’s manuscript (Boianovsky and Trautwein Reference Boianovsky and Trautwein2001a). Mauro and I did not speculate about the extent to which the evolution of macroeconomic thinking might have taken a different course, had Wicksell stuck to his original emphasis on expectations and the surplus notion of the “natural rate of interest.” In a paper published in the Cambridge Journal of Economics a few years later (Boianovsky and Trautwein Reference Boianovsky and Trautwein2006a), we examined how Erik Lindahl, in his critique of Wicksell’s monetary theory, came to stress the role of expectations in determining the return on real capital investment and the dynamics of inflation; this brought him to conceptualize monetary policy as the management of expectations. Lindahl argued along lines closer to Wicksell’s 1889 draft than to the latter’s 1898 book—probably without knowing of the draft’s existence. Lindahl’s relevant writings of the 1920s and early 1930s were not translated into English before 1939. At that time, his conclusions were overshadowed by the downgrading of monetary policy in John Maynard Keynes’s General Theory of Employment, Interest and Money (Reference Keynes1936), which—as Axel Leijonhufvud (Reference Leijonhufvud1981) has argued—had a more indirect and distorted Wicksell connection.

III. DOING ARCHIVEOLOGICAL HISTORY OF BUSINESS CYCLE THEORY

In 1995, one year before the defense of his PhD thesis at Cambridge, Mauro had its central chapter, “Wicksell’s Business Cycle,” published in the European Journal of the History of Economic Thought (Boianovsky Reference Boianovsky1995).Footnote ⁵ Reading or re-reading this article thirty years later, one can hardly fail to notice that it holds many of the ideas for the articles that Mauro (with and without coauthors) came to publish on Wicksell in the following decades. The work that he had invested in his dissertation shaped his research agenda and bore fruit far beyond the doctoral degree. His desire to form a coherent narrative from Wicksell’s fragmented and conjectural writings about business cycle theory made him develop a research strategy for reconstructing analytical content by rich contextualization. His strategy was based on two elements: (A) a thorough knowledge of the literature in longitudinal and latitudinal perspectives, and (B) an extensive collection of archival materials.

With respect to element (A), the challenge was to understand Wicksell in relation to the state of knowledge and debates in his time (the latitudinal perspective) but also in relation to earlier and later thought (the longitudinal). Mauro’s role model was clearly Wicksell himself in his “continuous engagement with past and contemporary thinkers" (Arthmar Reference Arthmar2025, p. 185).Footnote ⁶ An outstanding feature of Mauro’s 1995 article is the comprehensive fashion in which he traced the evolution of Wicksell’s thoughts on the business cycle in backward, forward, and sideways movements through the Swede’s comments on earlier and contemporary authors, dispersed in thirty-five books, articles, and reviews across three and a half decades, and through their connections, similarities, and differences with later theories.Footnote ⁷ Wicksell’s view on business cycles had a Malthusian background that made it original in two senses: He had developed it between 1888 and 1890 from Robert Malthus’s critique of Jean-Baptiste Say’s law, when he had just come to economics from neo-Malthusian campaigning in the socialist movement; and throughout his life he had held on to the idea that general overproduction takes the form of inventory accumulation. For him this was a key feature of depressions as phases in business cycles that derive from the repercussions of sporadic technical progress introduced in an economy with constant population growth and saving. The Malthusian origins and the emphasis on inventories in depressions as a form of capital accumulation were two characteristics that, embedded in Mauro’s rich narrative and supported by textual evidence, made Wicksell’s view of business cycles look more coherent and interesting as a point of departure for theorizing about cyclical growth than had been acknowledged in the literature before.

Element (B) of Mauro’s research strategy, the collection of archival materials, is less visible in the 1995 article than in his later works, but it is present in references to unpublished manuscripts and notebooks. Mauro may have been a passionate collector before,Footnote ⁸ but the formative experience came in the early 1990s with two extended visits to the Lund University Library (LUB), where the Wicksell papers are held. At the time, the collection comprised eighty-three boxes on seven shelf metres; it was not yet cataloged and only partly sorted. The options for copying material were to write excerpts with a pencil or to take a limited number of photocopies on the library’s machines at a high cost. Mauro evidently invested an enormous effort in sifting through the boxes for relevant correspondence (in a “stack” of about 4.000 letters), notes, drafts, and other materials, most of which were handwritten or typed in Swedish or German. He could neither speak nor write those languages but could read them to the extent that he was often able to spot what could be used as a clue or even textual evidence, and then went to find some speaker of Swedish and German who would confirm his guess and provide full translations. From 1997 onwards that was mostly me, I suppose, but during the first stages of his research he was assisted by a larger team (see the acknowledgments in Boianovsky Reference Boianovsky1995, pp. 400–401). The most valuable help with the Wicksell papers came from Eric Nicander, the head of the Manuscripts Department at the LUB (until 2009); he not only guided Mauro through the system but provided him frequently with photocopies beyond the budget.Footnote ⁹ The LUB experience was definitely formative for Mauro and provided him with many treasures for exploitation in later work. From there and then on he would visit many archives all over the world in the search for bits and pieces of evidence that he could fit into the jigsaw puzzles of his papers.

Archival research and a thorough study of the literature are—or ought to be—the bread-and-butter business of the historian of thought. Mauro’s combination of elements (A) and (B) was special, however, in its intensity and circular interplay that developed into a distinct working style. Starting from hunches about a promising paper project that were based on a broad reading of the available literature on the chosen topic, he would set off to the archives to collect material that would help to elucidate the formation and diffusion of the ideas and theories in question. In most cases, this entailed another round of studying pertinent literature to deepen the understanding of the collected material but also to question established interpretations of the theory under investigation. The process would thus go through a feedback loop, forming the sequence A–B–A. At stage B, in turn, Mauro often found material that, fitting or not into the project at hand, inspired him to pursue further projects. He would then study the surrounding literature and thereafter search for correspondence and unpublished documents in other archives, thus moving in the sequence B–A–B. These loops would often overlap and make Mauro especially productive by widening the scope and augmenting the chances of creative association.

To give Mauro’s method a name, I call it an “archiv(e)ological approach” (Trautwein Reference Trautwein2024, p. 370). The term may sound awkward, even though it is not my creation. Moreover, it has different meanings. In its shorter form (without “e”), “archivological” seems to be an older, rarely used synonym for archival science—and this, in itself, was not Mauro’s field of concern. More recently, however, it has made a career as a neologism in two disciplines: in architecture (without “e”) and in filmmaking (with “e”). Emilie Banville, for example, describes “archivology” in her research project as taking care of materials that “convey ideas and the traces of their evolution." It means “investigating architectural archives in their capacity as sites of knowledge production, beyond ones of knowledge retrieval.” It also means “The collection of ideas, beyond that of material artefacts and documents which contain them, is the backbone of archiving architecture, for buildings alone rarely testify to the complexity of design processes. In the archive, therefore, lies the potential for countless narratives yet to be crafted, written and told” (Banville Reference Banville2020; her emphasis).

According to Catherine Russell, “Archiveology refers to the reuse, recycling, appropriation, and borrowing of archival material that filmmakers have been doing for decades. It is not a genre of filmmaking as much as a practice that appears in many formats, styles, and modes” (Russell Reference Russell2018, p. 1; her emphasis). Whatever the notions of archiveology in those two disciplines, Mauro’s practice of using archives in the history of economics did amount to knowledge production by knowledge retrieval. He practiced “recycling” in the sense of bringing back forgotten, or, later on, distorted, thoughts into circulation. On the way there, “appropriation” may characterize his oftentimes secretive attitude in guarding the treasures he had found in public archives, for fear that others would snatch the publication of novel insights from the past away from him.Footnote ¹⁰ What counts in the end is that, by combining and recombining the findings with the accessible literature, Mauro filled numerous gaps and identified overlooked linkages in the history of macroeconomics.

It should be noted that Mauro’s approach can be described as archiveological also because it was open-minded. Mauro let the narrative take unexpected turns if the material pointed to lines of argument different from those originally conceived for the paper in question; and he loved to take detours even if they only helped to bring in as many pieces of archival evidence as possible in their own logic. In other words, Mauro did not follow preconceived lines of argument for which only supporting evidence would count. There was just one bias, but a strong one, about which we now and then discussed half-jokingly: He used to insist that “Wicksell was always right,” even in cases in which the master himself had expressed his doubts. In such cases Mauro would continue to search for supporting evidence in more remote parts of Wicksell’s oeuvre or other authors’ work, and the results often proved him—and Wicksell—right. This confidence probably emerged with the success of the 1995 article in synthesizing Wicksell’s scattered conjectures about business cycles into a coherent view.

One might be tempted to categorize the elements (A) and (B) in terms of internal and external history of economics.Footnote ¹¹ Mauro, however, cared little for methodological framing of his work and definitely disliked attempts to give priority to one or the other approach. In his studies, the history of economic thought is inextricably linked to the history of economists. Both elements, (A) and (B), are parts of external and internal history in that they help to contextualize the reconstruction of theoretical content, to trace the evolution of economics as a science, and to add theoretical content to historical developments of economics as an academic discipline. The feedback loops in Mauro’s archiveological approach substantiate the complementary relationship of internal and external history in his work even further, as will be demonstrated in the next section.

IV. THREE EXAMPLES OF ARCHIVEOLOGY

In the following I give three examples of Mauro’s archiveological approach to business cycle theory from my personal experience. The first is our article “Wicksell’s Lecture Notes on Economic Crises (1902/05),” published in Structural Change and Economic Dynamics (Boianovsky and Trautwein Reference Boianovsky and Trautwein2001b). Mauro had picked up the notes, handwritten in Swedish, during one of his visits to Lund but could not make sense of the manuscript within his work on the doctoral dissertation and the 1995 article. In 1999 we had the chance to meet in Brasília again, to finalize the work on Wicksell’s 1889 draft (see the previous section) and to start working on the lecture notes.Footnote ¹² This work process was a sequence of type B-A-B, starting from the transcription and translation of Wicksell’s manuscript. The next step was latitudinal reading on the German literature on crises that Wicksell referred to in his lectures (Wilhelm Roscher, Karl Marx, Wilhelm Lexis, Heinrich Herkner, and others). Looking at the notes in longitudinal perspective, we were surprised to see that a diagram by which Wicksell defended Robert Malthus against Jean-Baptiste Say looked like the twin of a figure used by Joan Robinson and John Eatwell, some seventy years later, to criticize Malthus. We could show that Robinson and Eatwell (Reference Robinson and Eatwell1973) were wrong and Wicksell was, “of course,” right because he had read Malthus more carefully.

The more important point in our article, however, was a clarification of Wicksell’s dividing lines between cumulative processes, crises, and business cycles through the notes. We based this on a synopsis of their respective key characteristics in Interest and Prices (Wicksell [1898] Reference Wicksell1936), “The Enigma of Business Cycles” (Wicksell [1907] Reference Wicksell1965), and the lecture notes of 1902/05.Footnote ¹³ The synopsis yielded a clear distinction of crises from cumulative processes and cycles, even if a crisis would not come without one or the other. Wicksell considered cycles in terms of real propagation of the impulse given by a rise in the “natural” rate of interest, and cumulative process in terms of nominal propagation of the same type of impulse. He described the propagation mechanism in crises as both real (output contraction) and nominal (deflation). The distinctive feature of crises is the prior emergence of false profit expectations (as compared to cumulative processes and cycles).Footnote ¹⁴ During the work on the synopsis, Wicksell’s cursory treatment of unemployment in all three writings puzzled us, given his neo-Malthusian background. It made us go back to the archives to collect further material (of which more below).

When we worked on the two articles (Reference Boianovsky and Trautwein2001a and Reference Boianovsky and Trautwein2001b), and also on later occasions, we were mostly sitting on the balcony in Mauro’s apartment, in the pleasant climate of Brasília. From there we were overlooking parts of Lago Paranoá and nearby stretches of savannah-style landscape with gray shrubs and red termite mounds. Mauro piled up stacks of books and photocopies around us, and we would sit for long hours to discuss the literature and negotiate over the course and length of our drafts. Most of the time, however, we would engage in scrupulous examination of handwritten manuscripts in Swedish and German, trying to figure out the thoughts of an odd North European scholar who had explored the darkest fields of economics 100 years earlier. For me, this stood in strong contrast to the surrounding sounds in the heat and the glaring light on that balcony. For Mauro, it was the environment in which he felt at home, in his research work even more than in private life. When we met in the northern hemisphere—whether in Germany or other parts of Europe, in North America, Japan, or China—he was incessantly concerned about the cold climate, at least in the first years of our collaboration. When the temperature was below twenty degrees centigrade, he would not go out unless protected by a thick long coat, with a scarf tight around his neck.

The second example of Mauro’s archiveological approach to business cycle theory is the article “Johan Åkerman vs. Ragnar Frisch on Quantitative Business Cycle Analysis,” published in the European Journal of the History of Economic Thought (Boianovsky and Trautwein Reference Boianovsky and Trautwein2007). Even if Wicksell did not have an elaborate business cycle theory, his famous metaphor of the economy as a rocking horse helped to shape the mold for most of modern business cycle theory, including the recent “Real Business Cycle” (RBC) approach. It inspired Ragnar Frisch to create the generic impulse-propagation nomenclature in his contribution to the Festschrift for Gustav Cassel (Frisch Reference Frisch1933). The origin of the metaphor was a footnote in a book review in which Wicksell remarked that “if one hits a rocking horse with a stick, the movements of the horse will be very different from those of the stick. The hit is the cause of the movement, but the object’s own equilibrium laws condition the form of the movement” (Wicksell Reference Wicksell1918, p. 71n). In his illustration of damped oscillations, Frisch cited wrongly another paper by Wicksell in which there was no rocking horse. Mauro suspected that Frisch had got it from Johan Åkerman, in the context of serving as first opponent at Åkerman’s defense of his dissertation “On the Rhythmics of Economic Life” at Lund University in 1928. Since both Frisch and Åkerman were inspired by Wicksell but followed fundamentally different approaches to explaining cyclical movements—Frisch, like Wicksell, regarding them as oscillations around equilibrium positions; Åkerman testing the scope and limits of harmonic (or spectral) analysis of time series—we believed that there was a story to tell.

In this case, the archiveological process followed the sequence A–B–A. We started from reading the pertinent publications of Frisch and Åkerman. Thereafter we went to the archives —Mauro to the National Library in Oslo for Åkerman’s letters to Frisch, while I retrieved Frisch’s letters to Åkerman from the LUB in Lund. The correspondence (in Norwegian and Swedish) added much to our understanding of the evolution of their different perspectives on economic dynamics and methodological issues. We had a division of labor—first just for fun but increasingly seriously—by which Mauro took the role of Frisch in our discussions and I the role of Åkerman, also in reading the literature at the background of their respective positions and weaving it into our story. The role allocation proved to be both amusing and productive, I think. The audience at the workshop on quantitative business cycle analysis organized by Guido Erreygers at the University of Antwerp in 2005 was clearly surprised by the spirit of controversy in which we presented the paper.

The third example is our article “Haberler, the League of Nations, and the Quest for Consensus in Business Cycle Theory in the 1930s,” published in HOPE (Boianovsky and Trautwein Reference Boianovsky and Trautwein2006b). This was a paper about the making of Gottfried Haberler’s Prosperity and Depression (1937), a research project commissioned by the League of Nations that came to be the standard reference in business cycle theory for the next fifty years. The article has few references to Wicksell but is a strong manifestion of Mauro’s passion for “dogged archival work,” carried out in another B–A–B sequence. Mauro had suggested the project to me after having come across a large set of letters in the Haberler Papers at the Hoover Institution in Stanford, while he was working on a larger editorial project (Boianovsky Reference Boianovsky2005). Most of the letters were written in correspondence with eighty-six colleagues whom Haberler contacted for a survey on the large variety of business cycle theories that circulated at the time of the Great Depression. The survey formed the first part of Prosperity and Depression, and its contextualization through studies of the cited literature and evaluation of the correspondence formed the first part of our paper.

The second part of Prosperity and Depression carried the title “Synthetic Exposition of the Nature and Causes of the Business Cycles.” Haberler had mentioned in the Preface that his draft had been thoroughly discussed at a conference of experts in summer 1936. He named Oskar Anderson, John Maurice Clark, Alvin Hansen, Oskar Morgenstern, Bertil Ohlin, and Jan Tinbergen; as we found out later, Dennis Robertson, Lionel Robbins, and Charles Rist were also part of the expert committee—all in all a rather diverse group of economists. By 2002, when Mauro and I worked on the paper, little was known about their influence on the consensus formation in the final version of Haberler’s synthesis. Mauro and I decided to go to Geneva together to look for the draft and records of the expert meetings in the archive of the League of Nations. We collected the draft and other material but could not find the records, neither in Geneva nor in other likely places. In the end, we managed to locate a large pack of verbatim records in the Ohlin Papers at the Swedish National Archives. These records, combined with surrounding correspondence, gave fascinating insights into the contents and style of live discussion in an international group of leading economists at the time. Mauro demonstrated with this paper, as with so many others, that he was a master of rich contextualization. My role in the internal division of labor on the Haberler project was mainly that of a hunter of records and trimmer of drafts. Even so, the article that was published four years later came to have the size of a short book. Mauro was a champion of long articles. Some of his pieces (with and without coauthors) were more than fifty printed pages long, in times when most journals had strict page limits around a third of this length. It may be seen as recognition of quality, or insight value added by Mauro’s archiveological approach, that journal editors accepted his gross transgressions of standard article length. The editors of HOPE were especially generous in that respect.

V. RECONSTRUCTING WICKSELL’S NOTIONS OF INVOLUNTARY UNEMPLOYMENT

Another long piece (of fifty-one pages), also published by HOPE, was our article “Wicksell, Cassel and the Idea of Involuntary Unemployment” (Boianovsky and Trautwein Reference Boianovsky and Trautwein2003). Wicksell had paid surprisingly little attention to unemployment in his major writings on cumulative deflation, business cycles, and crises. As he generally proceeded from the assumptions of free competition and wage flexibility in a long-term perspective, full employment was a feature of the cumulative process not only in the case of inflation. Deflation, too, was, in his view, essentially a cumulative downward adjustment of prices and wages only, not of output and employment—or not, at any rate, in a cumulative fashion (e.g., Wicksell [1898] Reference Wicksell1936, p. 143). In his outlines of business cycle theory and even in his treatment of David Ricardo’s “machinery problem,” Wicksell likewise tended to characterize unemployment as a minor temporary phenomenon, at most. Lars Jonung had pointed all this out in a HOPE article on “Knut Wicksell on Unemployment” (Jonung Reference Jonung1989). He also drew attention to topical articles and unpublished material in which Wicksell discussed unemployment more explicitly, among them an article of 1908 with a “clear Keynesian flavour” (Jonung Reference Jonung1989, p. 29). This, together with Jonung’s general conclusion that Wicksell “lacked a coherent theory of unemployment” (p. 39), provoked Mauro (and induced me) to take a closer look at the Wicksell archives again. Moreover, we decided to compare Wicksell’s views on unemployment with those of Cassel, who in many ways—as a theoretical economist and public figure in policy debates—was his antipode in contemporary Sweden (Carlson and Jonung Reference Carlson and Jonung2006). Cassel’s views on unemployment were more explicitly embedded in his theoretical framework, but they had changed markedly over time from Fabian socialism to conservative antiunion positions.Footnote ¹⁵

We structured our article around the unemployment taxonomies put forward by Wicksell in a 1901 public lecture and, almost simultaneously by Cassel (Reference Cassel1902), in a book on social policy. We found it remarkable that both of them distinguished between voluntary and involuntary (“forced”) unemployment, and that they both developed notions of normal unemployment—but with significant differences. While Wicksell kept the cumulative process apart from business cycles, we could show by textual evidence that the idea of involuntary unemployment in his writings on business cycles and crises was associated with the notion that a full employment equilibrium solution may not exist if (and when) there is no positive value of the market rate of interest that would equilibrate saving and investment. Decades later, Keynes developed this argument as one of his key insights in the General Theory (Reference Keynes1936, pp. 242–243), in explicit critique of Wicksell’s concept of the natural rate of interest. In the footsteps of Jonung (Reference Jonung1989), we found even further thoughts of Wicksell with a clear (proto-)Keynesian flavor. In addition, we drew attention to an undated manuscript, clearly written in the last two or three years before Wicksell’s death, in which he had argued that labor-saving technological progress may produce permanent unemployment. We interpreted this as an implicit recantation of his well-known earlier interpretation that unemployment caused by technological progress can only be of temporary character.

In a subsequent paper entitled “Wicksell on Technical Change, Real Wages and Employment” that Mauro wrote together with Harald Hagemann, the two demonstrated in detail that our supposition of a recantation had been premature. Boianovsky and Hagemann (Reference Boianovsky, Hagemann, Bellet, Gloria-Palermo and Zouache2005) showed that Wicksell’s late-in-life conjectures about the possibility of permanent technological unemployment were actually a logical corollary of his earlier critique of Ricardo in Volume I of the Lectures (Wicksell [1901, 1911] Reference Wicksell1934, pp. 133–144). When technical progress makes the marginal productivity of labor employed in production with old techniques fall towards zero, an economy under free competition “would converge to a position at zero wages with only part of the labour force absorbed, as suggested by Wicksell in the manuscript” (Boianovsky and Hagemann Reference Boianovsky, Hagemann, Bellet, Gloria-Palermo and Zouache2005, p. 88). In the Lectures, I, Wicksell ([1901, 1911] Reference Wicksell1934, p. 141) had pointed out that—contrary to Ricardo’s supposition that the introduction of labor-saving machinery could reduce the social output—“the total product is maximized,” even if wages are forced below the subsistence level. In this case, workers need to be and tend to be subsidized by “poor relief, as happened in England” under Gilbert’s Act during the early period of industrialization, in Ricardo’s time. Mauro was certainly happy to have proved again that Wicksell was right—contrary to Paul Samuelson’s contention that “Ricardo was right” and “Wicksell was wrong” (Samuelson 1989).

Both papers, Boianovsky and Trautwein (Reference Boianovsky and Trautwein2003) and Boianovsky and Hagemann (Reference Boianovsky, Hagemann, Bellet, Gloria-Palermo and Zouache2005), were fruits of the PROBRAL project.Footnote ¹⁶ The former was presented at the Wicksell Chair Centennial symposium in November 2001, to celebrate the anniversary of Wicksell’s appointment to a chair at Lund University, which had finally secured him, at the age of almost fifty years, a small but safe livelihood. The 2001 symposium, organized by the Arne Ryde Foundation at the department of economics in Lund, took place at Trolleholm Castle and the Grand Hotel in Lund. The lush and stimulating atmosphere of the conference, which ended in a jazz night that, among other sessions, featured “Brazilian sketches” (by Jim Tomlinson and Stacey Kent), came to be remembered by both Mauro and me as a highlight in our academic lives.Footnote ¹⁷ The Boianovsky and Hagemann (Reference Boianovsky, Hagemann, Bellet, Gloria-Palermo and Zouache2005) paper—with its recantation of our recantation view—was written a few months later and presented at a conference on Austrian and Swedish economics, organized by the University Jean Monnet of Saint-Etienne in March 2002. It took place at another castle, the Chateau de Saint-Victor-sur-Loire, overlooking a river gorge. That conference, too, was a delightful demonstration of the advantages of academic employment.Footnote ¹⁸

VI. LOOKING AT PRESENT MACROECONOMICS IN THE LIGHT OF THE PAST

My account of Mauro Boianovsky’s work on Wicksell is far from complete. The selection of articles that I refer to in this article is based on my recollections of the most notable of our joint projects. Mauro produced at least twice as many articles and chapters on Wicksell and related topics. Around the year Reference Boianovsky and Psalidopoulos2000, he began to enlarge his portfolio by intensifying his research on business cycle theory and macroeconomics in the generations after Wicksell. From 2008 onwards, he turned his attention increasingly towards development economics (see the other contributions to this symposium). His influence on the research community, in particular on younger scholars, was greatly enhanced by his increasing involvement in the organization of conferences, special issues, and other publications in general macroeconomics and development economics. His publication record grew immensely with his coverage of these areas. Yet, he came back to Wicksell occasionally in later years, and both his earlier and later writings on Wicksell were increasingly cited in the literature, also by prominent macroeconomists such as Brad De Long, David Laidler, and Michael Woodford.

In the longitudinal parts of his papers Mauro usually took a forward perspective, looking at how the concept or theory of the past at the center of his attention related to posterior developments in economics. In a few cases, when history came his way, he seized the opportunity to demonstrate the usefulness of doing history of economic thought by taking a backward perspective, looking at current developments in economics or the real world through the lenses of past economists. A case in point is the work that Mauro did together with Roger Backhouse on “Secular Stagnation” (Backhouse and Boianovsky Reference Backhouse and Boianovsky2016). In 2013, five years after the climax of the Global Financial Crisis, no upturn in the economy was in sight. Lawrence Summers suggested that the stagnation was consistent with a negative natural rate of interest (à la Wicksell and Keynes), implying that investment was persistently falling short of the level required for full equilibrium at any non-negative interest rate. In their article in the European Journal of the History of Economic Thought (EJHET), Roger and Mauro presented a history of the concept of “secular stagnation” from the 1930s and following decades, when Alvin Hansen and his students (among them Paul Samuelson) developed it, to its revival by Summers. They discussed both the theoretical and political dimensions of the concept, linking it to Keynesian theory as well as to the New Deal, the Cold War, and changing conceptions of economic maturity.

The Global Financial Crisis of 2007–08 itself provided an opportunity for Mauro to present a largely unknown article by Wicksell, published in Ekonomisk Tidskrift in 1908, on the lessons of the 1907 crisis in the United States for banking legislation (Boianovsky Reference Boianovsky2011). In his article, published by the Journal of the History of Economic Thought (JHET), Mauro drew attention to Wicksell’s definition of three principles of sound banking. He claimed that Wicksell was a pioneer in making a clear distinction between the solvency and the liquidity of banks, the two standard requirements in modern banking regulation. Advancing a high elasticity of the loan supply at times of crisis as a desirable third requirement, Wicksell demanded that regulators should allow the supply of credit by commercial banks to be flexibly accommodating all reasonable requests for loans (with suitable collateral and at moderate rates of interest) rather than restricting them by inflexible reserve rules.Footnote ¹⁹ This would be part of a policy to keep the price level stable, thus fully in line with Wicksell’s vision of monetary policy in Interest and Prices ([1898] 1936). Mauro argued that Wicksell’s 1908 argument about the interdependence between solvency, liquidity, and flexibility, which related to the microeconomic effects (on banking firms) of macroeconomic instability, broke new ground at the time. He pointed out that many aspects of this interdependence were still not well understood, or outright ignored, by macroeconomists 100 years later, when the Global Financial Crisis struck.

Mauro’s greatest success in confronting modern economics with thinking of the past had actually come before the Global Financial Crisis. At the History of Economics Society conference that took place at Victoria University, Toronto, in 2004, he organized a session in which Michael Woodford was confronted with critique of his Interest and Prices (2003) from different historical angles. Woodford had chosen the title of Wicksell’s 1898 classic for his treatise on the Foundations of a Theory of Monetary Policy (subtitle of Woodford Reference Woodford2003). He had dubbed his approach to modeling the economy in terms of DSGE (dynamic stochastic general equilibrium) a “neo-Wicksellian framework,” because he aimed to show that a rule-based interest-rate policy of keeping inflation near zero is pareto-superior to any other strategy. Mauro saw an opportunity for comparing the neo-Wicksellian DSGE framework with the original framework of Wicksell’s monetary theory and other historical and methodological approaches. At the session, David Laidler, Kevin Hoover, Perry Mehrling, plus Mauro and myself presented critical comments on Woodford’s Interest and Prices, before Woodford replied to all of them. Revised versions of the comments and the reply were published in JHET with an introduction by Mauro (Boianovsky Reference Boianovsky2006). In our joint contribution on “Wicksell after Woodford” (Boianovsky and Trautwein Reference Boianovsky and Trautwein2006c), Mauro and I pointed out that—in comparison with old-style Wicksellian theory (Wicksell and Lindahl)—Woodford’s neo-Wicksellian DSGE framework was lacking in crucial aspects, such as monetary control in a cashless economy, the role of banks and other financial intermediaries, and the effects of interest-rate gaps on capital formation. Before long, the Global Financial Crisis would reveal the costliness of such theoretical neglect.

Starting his talk at the Toronto session in 2004, Woodford described the reaction of his colleagues at Princeton when he had told them about having his 2003 book scrutinized at a history of thought conference. They had quipped that, going by this invitation, his opus magnum had gone down in history after only one year. With some pride, Mauro (Boianovsky Reference Boianovsky2006, p. 142) finished the introduction to the JHET mini-symposium by reporting Woodford’s response: “[He] replied to his colleagues that historians of economic thought are not just people who pay attention to old texts, but primarily economists who read carefully other economists’ works. Exactly.”

Mauro could have added that Woodford also had told his colleagues that it is risky to ignore historians of thought. They are, after all, people who influence economists’ posthumous recognition. It is evident that Mauro did exactly that with regard to Wicksell but also for many other thinkers of the past. It is deeply deplorable that he was stopped so early. At the end of his life, he still had his passion and plans for further archiveological work.