Axel Leijonhufvud

Axel Leijonhufvud

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Axel Leijonhufvud is a Swedish economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...

, currently professor emeritus
Emeritus
Emeritus is a post-positive adjective that is used to designate a retired professor, bishop, or other professional or as a title. The female equivalent emerita is also sometimes used.-History:...

 at the University of California Los Angeles (UCLA) and professor at the University of Trento
University of Trento
The University of Trento is an Italian university located in the cities of Trento and Rovereto. It has been able to achieve considerable results in didactics, research and international relations, as shown by Censis University Guide and by the Italian Ministry of...

, Italy.

He obtained his Bachelors degree at the University of Lund, earned an MA in Economics from the University of Pittsburgh
University of Pittsburgh
The University of Pittsburgh, commonly referred to as Pitt, is a state-related research university located in Pittsburgh, Pennsylvania, United States. Founded as Pittsburgh Academy in 1787 on what was then the American frontier, Pitt is one of the oldest continuously chartered institutions of...

 and a
Ph.D. in Economics from Northwestern University
Northwestern University
Northwestern University is a private research university in Evanston and Chicago, Illinois, USA. Northwestern has eleven undergraduate, graduate, and professional schools offering 124 undergraduate degrees and 145 graduate and professional degrees....

 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
University of Trento
The University of Trento is an Italian university located in the cities of Trento and Rovereto. It has been able to achieve considerable results in didactics, research and international relations, as shown by Censis University Guide and by the Italian Ministry of...

 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
Robert W. Clower
Robert Wayne Clower was an American economist. He is credited with having largely created the field of stock-flow analysis in economics and with seminal works on the microfoundations of monetary theory and macroeconomics....

.

In the book, Leijonhufvud argued that John Hicks
John Hicks
Sir John Richard Hicks was a British economist and one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the field of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model , which...

' IS/LM 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
Mainstream economics
Mainstream economics is a loose term used to refer to widely-accepted economics as taught in prominent universities and in contrast to heterodox economics...

, it presaged the rational expectations
Rational expectations
Rational expectations is a hypothesis in economics which states that agents' predictions of the future value of economically relevant variables are not systematically wrong in that all errors are random. An alternative formulation is that rational expectations are model-consistent expectations, in...

 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
Lars Peter Hansen
Lars Peter Hansen is an economist at the University of Chicago.- Biography :After graduating from Utah State University and the University of Minnesota Lars Peter Hansen (b. October 26, 1952 in Champaign, Illinois) is an economist at the University of Chicago.- Biography :After graduating from...

, Peter Howitt
Peter Howitt (economist)
Peter Wilkinson Howitt is a Canadian economist. He is the Lyn Crost Professor of Social Sciences at Brown University. Howitt is a Fellow of the Econometric Society since 1994 and a Fellow of Royal Society of Canada since 1992...

, David K. Levine
David K. Levine
David Knudsen Levine is the John H. Biggs Distinguished Professor of Economics at Washington University in St. Louis. His research includes the study of intellectual property and endogenous growth in dynamic general equilibrium models, the endogenous formation of preferences, social norms and...

, Edmund S. Phelps, Thomas J. Sargent
Thomas J. Sargent
Thomas John "Tom" Sargent is an American Nobel Memorial Prize in Economic Sciences winning economist, specializing in the fields of macroeconomics, monetary economics and time series econometrics...

, and Kenneth L. Sokoloff were among the contributors to this conference.

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