I learned today that my friend, colleague and mentor, Axel Leijonhufvud passed away on Monday May 2nd. Axel was one of the most creative macroeconomists of his generation and a towering presence in UCLA macro from 1964 until his departure in 1995 when he took up an appointment at the University of Trento.
In 2006 I was privileged to organize a conference in Axel’s honor at UCLA that was later published as a Festschrift, Macroeconomics in the Small and the Large, with contributions from his friends and admirers, one of whom, Ned Phelps, was a Nobel Laureate and two more, Tom Sargent and Lars Hansen, went on to win the Nobel Memorial Prize subsequently.
UCLA Faculty at the 2006 conference in honor of Axel Leijonhufvud
This photo was taken at the conference dinner on the evening of August 30th 2006. It features, from left to right, Joe Ostroy, Gary Hansen, Roger Farmer, Axel Leijonhufvud, Ken Sokoloff, John Riley and Mike Intriligator.
I first came across Axel’s writing as an undergraduate student at Manchester University where we were taught from his doctoral dissertation, Keynes and the Keynesians; a book that shot Axel to intellectual rock stardom. He argued in that book that Keynes’ General Theory had nothing to do with sticky wages and prices but was instead about inter-temporal coordination failure. Here is a link to a 2004 interview with Brian Snowdon that provides an excellent introduction to Axel’s thought.
Axel was part of a long UCLA tradition of independent thinking and he was responsible for recruiting me to UCLA in 1987. He never accepted mainstream interpretations of macroeconomics and was wary of consensus. And although Axel’s work was non-technical in nature, he recognized the importance of mathematics and was attracted to the formalism of theories in mathematical models. His view of the rational expectations revolution was one of amused bemusement. I recall a conversation with him in which, to paraphrase,
‘My view of modern macroeconomics is much like my view of modern Hollywood movies. The pyrotechnics are spectacular but the plots are sadly lacking.
Although Axel recognized the importance of mathematical methods, he also recognized the limitations of formalism and he insisted that a good economist must be aware of the past. To this end he was a strong supporter of the teaching of economic history and the history of thought as part of the core curriculum.
Economic history disappeared as a core subject from many economics departments in the 1980s. UCLA was an exception largely due to Axel’s insistence that a good macro economist needs to understand the past before she can understand the present or the future. He was instrumental in bringing Ken Sokoloff to UCLA and in supporting Ken’s successful efforts to attract Naomi Lamoreaux and Jean-Laurent Rosenthal to UCLA
Axel’s support of the history of thought was deemed anachronistic by many of his contemporaries who viewed economics through the lens of a linear progression of knowledge. In contrast, Axel viewed science — and particularly economics as a non experimental science — as a tree in which herd behavior led often to persistent treks down roads to nowhere. Here is an excerpt from his 2004 interview with Brian Snowdon,
… the history of economics [is like] a decision tree. … That's exactly why those who are working at the frontier of the subject should know some history of economic thought. This is a different reason than just wanting to know the history of the subject for antiquarian interest. This view also suggests that economics itself exhibits very strong path dependence. So if you take the wrong path, the errors can be with you for a long time.
Axel was a follower of Imre Lakatos and his view of the progression of economics was heavily influenced by Lakatos’ methodology and the concept of progressive and degenerative scientific research programs. In his view, modern macroeconomics is a degenerative research program that took a wrong turn in the 1950s. Axel was right about this and it is a theme that has influenced my own research agenda. Time will tell if the profession will eventually agree.
Yours Truly with my friend and teacher David Laidler, Axel Leijonhufvud and Axel’s wife Earlene Craver
Axel Leijonhufvud: September 6 1933 — May 2nd 2022