Price expectations, capital accumulation and employment: Lindahl's macroeconomics from the 1920s to the 1950s

Erik Lindahl's approach to macroeconomics focused on the non-neutralityof monetary policy (in the short and the long run) and on thedenial of the existence of natural rates of interest and unemployment.From the 1920s until his death in 1960, Lindahl advocated theuse of norms for monetary policy to fight inflation and deflationprecisely because he would not rely on the market system's returnto natural rates. Making use of hitherto unexplored material,this paper analyses the development of Lindahl's thinking aboutprice level changes, investment and employment from the 1920sto the 1950s.