Assisted by James Ahiakpor's careful research, we may perhaps agree on  
the following points:

1. Henry Thornton, David Ricardo, and Alfred Marshall, and perhaps  
others too, all developed versions of the cumulative process (CP)  
analysis before Wicksell. I would further argue that Thornton was  
chronologically the first to present the CP analysis and that his  
version was more thorough, complete, subtle, and sophisticated than  
either Ricardo's or Marshall's version. But Ahiakpor may not agree.

2. Wicksell was inspired by Ricardo's version and perhaps Marshall's  
too, although he didn't cite Marshall.

3. Ricardo, Marshall and company advanced a third reason -- in  
addition to (i) diminishing marginal productivity of accumulating  
capital stock, and (ii) bankers' hiking of their lending rates to  
protect their cash reserves from depletion in the face of inflation- 
induced cash drains into internal circulation and into external  
outflows through the balance of payments -- to explain why the  
differential between the natural and market rates of interest must  
eventually vanish, thus ending the cumulative process. That third  
reason was that rising prices, by increasing the nominal value of real  
investment projects, necessarily increases the demand for bank loans  
to finance those investments. The  resulting increased loan demand  
eventually bids the loan rate into equality with the natural rate.

Ahiakpor quotes Wicksell as saying that banks could keep the  
cumulative process going forever causing the price level to rise  
without limit. But that's true only in Wicksell's hypothetical pure  
credit regime in which the money stock (called "credit" by Wicksell)  
consists solely of bank deposits transferable by cheque and there  
exists no reserve constraint and/or metallic cash base to limit  
expansion of the money stock and price level. But even in this extreme  
case in which there is no self-equilibrating market mechanism to  
eliminate the gap between market and natural rates of interest,  
Wicksell, ever the price-level stabilizationist, proposed that the  
central bank supply the missing stabilizing mechanism in the form of a  
feedback policy rule. The central bank would follow the rule requiring  
it to adjust the market rate of interest in response to general price  
movements so as to counter those movements and stabilize prices (and  
the stock of bank money) at some desired level.

Actually Wicksell prescribed not one feedback rule but two. The first  
directs the central bank to adjust the market rate of interest in the  
same direction that prices are moving, stopping only when price  
movements cease. In Wicksell's own words: "If prices rise, the rate of  
interest is to be raised; and if prices fall, the rate of interest is  
to be lowered; and the rate of interest is henceforth to be maintained  
at its new level until a further movement of prices calls for a  
further change in one direction or another." This quote comes from  
page 189 of his 1898 Interest and Prices.

Wicksell's second rule has the central bank adjust the bank rate in  
response to price deviations from target. Unlike the first rule, which  
seeks merely to halt price movements, the second rule seeks to reverse  
and thus negate those movements so as to restore prices to their pre- 
existing target level. Thus on page 223 of Volume 2 of his 1906  
Lectures on Political Economy Wicksell states that central bankers  
must endeavor to reverse or roll back price movements by engaging in  
"a raising or lowering of bank rates" in order "to depress the  
commodity price level when it showed a tendency to rise and to raise  
it when it showed a tendency to fall."

Formal analysis reveals that both rules stabilize prices and money to  
a certain extent in Wicksell's CP model. But a combination of both  
rules together stabilizes them even more. True, Wicksell did not  
propose that both rules be combined into one. But at least he  
formulated some form of stabilizing policy rules for his hypothetical  
pure credit regime and for mixed cash & credit regimes as well.  
Wicksell was as strong an advocate of price-level stability as Irving  
Fisher and David Ricardo.

Ahiakpor thinks that Wicksell is overrated and has been given more  
credit than he is due. In truth, however, Wicksell added so many  
innovations to classical monetary analysis as to merit the economics  
profession's esteem. But perhaps that should be the subject of another  
post.