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What is your first association when somebody talks to you about the economy?

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From the collection: Masters Series


From the collection Masters Series

Axel Leijonhufvud was one of the most creative and perspicacious macroeconomists of the last century. He became famous early in his life for his contention that the Keynesian Economics being taught and understood at that time was a serious misinterpretation of Keynes’s ideas. Instead of the emphasis on inflexible wages and prices as being central, Keynes, he argued, was focused on the failure of intertemporal coordination. Taking that challenge into consideration required a different way of looking at the economy and theorizing disequilibrium. As a committed supporter of the history of economic thought, he was singularly aware of the problems of taking a wrong path intellectually—a mistake that could lead to years of misguided work. And indeed, that wrong turn, away from the fertile ground of disequilibrium macroeconomics did occur, as the profession moved away from it to what he may have seen as an academic and theoretical dead end. His latter career was devoted to finding more meaningful and generative foundations for dealing with the deeper issues of macroeconomic and monetary stability. In the last decade of his life he was a founding member of the Institute for New Economic Thinking and a key part of its academic council.

In this animation, taken from his speech at INET Berlin in 2012, he describes the process by which macroeconomic instability is generated. We invite you to see it and to explore the many other contributions of this true intellectual giant.

For those interested in engaging more deeply with his work, we have created a collection of video, transcripts, and all of the articles that he has written. Many of these remain fruitful for students and scholars exploring how to move forward in economics. Reading Axel’s work has provided, for us, a thunderclap of clarity on several issues. We hope that the same is true for you as you engage with the mind and work of this true, great, original master of economics.


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