ABSTRACT

In 1931, when Hayek prepared his German edition of various non-German contributions to monetary theory (Hayek 1933), he asked Erik Lindahl to join the project with a paper on the ends and means of monetary policy (Shehadi 1991: 382). Lindahl, who had great difficulties in meeting deadlines with his slow and careful way of writing, declined and referred Hayek to Myrdal who had written a long essay in Swedish on the reinterpretation of Wicksell’s concept of monetary equilibrium (Myrdal 1931). Even though Myrdal had, in that essay, criticized Lindahl rather harshly for his interpretation of Wicksell, Lindahl did not seem to bear him a grudge. In the German version commissioned by Hayek, Myrdal certainly toned down his criticism of Lindahl. But he did not change his basic line of argument, and Hayek never came to like Myrdal’s contribution, because it contained many outright attacks on the theoretical tenets and policy conclusions that Hayek had earned a name for.