Knut Wicksell

natural rate of interest; cumulative process.

Knut Wicksell (1851–1926) was a Swedish economist who spent much of his career at Lund University. He argued that when the market rate of interest falls below the natural rate, banks fuel a cumulative inflationary spiral — and vice versa. This framework directly shaped 20th-century monetary theory, influencing both the Austrian school and later macroeconomists including Keynes.