Axel Leijonhufvud

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Axel Leijonhufvud
Born 1933
Stockholm, Sweden
Nationality Swedish
Institution University of Trento
UCLA
Brookings Institution
School/tradition Neoclassical economics
Alma mater Lund University
University of Pittsburgh
Northwestern University
Influences Léon Walras

Axel Leijonhufvud (born 1933) is a Swedish economist, currently professor emeritus at the University of California Los Angeles (UCLA) and professor at the University of Trento, Italy.

Academic career[edit]

He obtained his Bachelors degree at the University of Lund, earned an MA in Economics from the University of Pittsburgh and a Ph.D. in Economics from Northwestern University in 1967. He accepted a position as Acting Assistant Professor in the Economics Department at UCLA in 1964, was promoted to Associate Professor in 1967, and to Full Professor in 1971. In 1991, he started the Center for Computable Economics at UCLA and remained its Director until 1997. Leijonhufvud was awarded an honoris causa doctoral degree by the University of Lund in 1983. In 1995 Leijonhufvud was appointed Professor of Monetary Theory and Policy at the University of Trento in Italy, where he is also part of the CEEL (Computable and Experimental Economics Laboratory).

Economic theory[edit]

In 1968 he published a famous scholarly book entitled On Keynesian Economics and the Economics of Keynes. Leijonhufvud's monetary economics vitally depended on the earlier work of his friend and mentor, the American economist Robert W. Clower.

In the book, Leijonhufvud argued that John Hicks' IS/LM (Investment—Saving / Liquidity preference—Money supply) formulation of Keynes General Theory was inadequate as an explanation for the "involuntary unemployment" in John Maynard Keynes's writings. Rather, Leijonhufvud's reading of Keynes emphasizes disequilibrium phenomena, which can't be addressed in the IS/LM framework, as central to Keynes explanation of unemployment and economic depression. Leijonhufvud used this observation as a point of departure to advocate a "cybernetic" approach to macroeconomics where the algorithm by which prices and quantities adjust is explicitly specified allowing the dynamic economy to be studied without imposing the standard Walrasian equilibrium concept. In particular, Leijonhufvud advocated formally modelling the process by which information moves through the economy.[1] While the "cybernetic" approach may have failed to gain traction in mainstream economics,[2] it presaged the rational expectations revolution that would ultimately supplant the IS/LM model as the dominant paradigm in academic macroeconomics.

Leijonhufvud wrote also the article "The Wicksell Connection: Variation on a Theme",[3] where he presents the Z-Theory. In another article called "Effective Demand Failures",[4] he presents the Corridor Hypothesis.

In 2006 the Economics Department at UCLA organized a conference in honor of Axel Leijonhufvud's contributions to the department and to economics at large. Lars Peter Hansen, Peter Howitt, David K. Levine, Edmund S. Phelps, Thomas J. Sargent, and Kenneth L. Sokoloff were among the contributors to this conference.[5]

Notes[edit]

  1. ^ Snowdon 2002
  2. ^ Howitt 2002
  3. ^ Leijonhufvud 1979
  4. ^ Leijonhufvud 1973
  5. ^ Farmer 2008

References[edit]

External links[edit]