Book contents
- Frontmatter
- Dedication
- Contents
- Preface
- List of Contributors
- Dramatis Personae at the end of 1937
- Introduction and Summary
- Part I The roots
- Part II The approach of the Stockholm School
- 4 Expectation and plan: The microeconomics of the Stockholm School
- 5 Sequence analysis and optimization
- 6 There were two Stockholm Schools
- 7 On formal dynamics: From Lundberg to chaos analysis
- 8 Lundberg, Keynes, and the riddles of a general theory
- 9 Macrodynamics and the Stockholm School
- 10 Ohlin and the General Theory
- 11 The monetary economics of the Stockholm School
- 12 The Austrians and the Stockholm School: Two failures in the development of modern macroeconomics?
- 13 The political arithmetics of the Stockholm School
- 14 After the Stockholm School
- Part III The impact of the Stockholm School
- Part IV What remains of the Stockholm School?
- The Stockholm School: A non-Swedish bibliography
11 - The monetary economics of the Stockholm School
Published online by Cambridge University Press: 05 July 2013
- Frontmatter
- Dedication
- Contents
- Preface
- List of Contributors
- Dramatis Personae at the end of 1937
- Introduction and Summary
- Part I The roots
- Part II The approach of the Stockholm School
- 4 Expectation and plan: The microeconomics of the Stockholm School
- 5 Sequence analysis and optimization
- 6 There were two Stockholm Schools
- 7 On formal dynamics: From Lundberg to chaos analysis
- 8 Lundberg, Keynes, and the riddles of a general theory
- 9 Macrodynamics and the Stockholm School
- 10 Ohlin and the General Theory
- 11 The monetary economics of the Stockholm School
- 12 The Austrians and the Stockholm School: Two failures in the development of modern macroeconomics?
- 13 The political arithmetics of the Stockholm School
- 14 After the Stockholm School
- Part III The impact of the Stockholm School
- Part IV What remains of the Stockholm School?
- The Stockholm School: A non-Swedish bibliography
Summary
The Stockholm School was christened by Bertil Ohlin in Economic Journal in 1937. He used this name to refer to the scientific work by Alf Johansson, Dag Hammarskjöld, Erik Lindahl, Erik Lundberg, Gunnar Myrdal, and himself that was published between 1927 and 1937, mostly in Swedish. Ohlin wanted to challenge Keynes's claim of having conceived a new theory about macroeconomic developments. According to Ohlin, the Stockholm School had worked with similar tools and problems for many years and had successfully reached similar conclusions. Schumpeter (1954) picked up this thread, although without any far-reaching analysis of the subject. Later Landgren (1960) questioned Ohlin's conclusion. In more recent years Steiger (1971, 1978) and Brems (1978) have praised Ohlin's articles (1933, 1934) as clear forerunners of Keynes's General Theory. Patinkin (1982), however, has remained skeptical about this interpretation.
It is the purpose of this article to reopen the case. My starting point in this endeavor is the following interpretation of what was new in the General Theory. In my opinion, the first important building block in Keynes's theory is the idea that output adjustment instead of price adjustment equilibrates the output market. This is emphasized by Patinkin (1982). The second significant building block is Keynes's monetary theory. In it we see the continuation from Marshall (1975) and Pigou (1917) in focusing on the supply of money and the demand for money. But by setting the interest elasticity at the center of liquidity preference, Keynes moved a long way toward a portfolio theory.
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- The Stockholm School of Economics Revisited , pp. 267 - 290Publisher: Cambridge University PressPrint publication year: 1991
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