|Institution||University of Trento
School or tradition
|Alma mater||Lund University
University of Pittsburgh
|Influences||Léon Walras, John Maynard Keynes|
He obtained his Bachelor's 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).
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. While the "cybernetic" approach may have failed to gain traction in mainstream economics, 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", where he presents the Z-Theory. In another article called "Effective Demand Failures", 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.
- Snowdon 2002
- Howitt 2002
- Leijonhufvud 1979
- Leijonhufvud 1973
- Farmer 2008
- Farmer, Roger E.A. (editor), Macroeconomics in the Small and the Large. Essays on Microfoundations, Macroeconomic Applications and Economic History in Honor of Axel Leijonhufvud, Edward Elgar, 2008.
- Howitt, Peter A Dictionary Article on Axel Leijonhufvud’s On Keynesian Economics and the Economics of Keynes: A Study in Monetary Theory. Brown University. January 29, 2002. Accessed April 28, 2008.
- Leijonhufvud, Axel On Keynesian Economics and the Economics of Keynes:A Study in Monetary Theory, New York: Oxford University Press, 1968.
- Leijonhufvud, Axel Effective Demand Failures The Swedish Journal of Economics, Vol. 75, No. 1, (Mar., 1973), pp. 27–48
- Leijonhufvud, Axel The Wicksell Connection: Variation on a Theme. UCLA. November 1979.
- Snowdon, Brian "Outside the Mainstream: An Interview with Axel Leijonhufvud", Macroeconomic Dynamics, 8, 2004, 117–145. Online pre-print version: Outside the Mainstream: An Interview with Axel Leijonhufvud. Northumbria University. May 17, 2002. Accessed April 28, 2008.