ABSTRACT
A group of Swedish economists of the 1930s who provided a distinctive dynamic theory of macroeconomics and policy proposals to revive depressed national economies.
The principal writers were heavily influenced by Wicksell, who set out the conditions for price stability and monetary equilibrium, describing the cumulative processes of contraction and expansion caused by divergences between the natural and money rates of interest. Myrdal, Ohlin and Lindahl were leading members of the school. Myrdal in setting out the conditions for monetary equilibrium made the ex-ante and ex-post distinction. Lindahl wanted to determine time functions or curves based on the initial values of economic values and the conditions determining the fluctuations in those values. He analysed plans which express economic motives. In the process of planning different changes have to be recognised: those caused by altered anticipations, economic events, immediate and distant influences on planned actions, and those which are so fundamental as to require a new plan. Unlike their theoretical competitors in Cambridge, England centred on John Maynard Keynes, they used period analysis, thereby avoiding comparative statics. Independently Ohlin, for example, developed key concepts such as the multiplier by tracing the effects of investment over several periods and the speed of inventory adjustment; also he considered the consequences of different methods of financing public works.
