ABSTRACT
Lundberg is positive towards the General Theory as long as it is used "[to determine] the degree of employment which is possible under given conditions" (ibid., p.34), where the latter are basically represented by Keynes' three psychological functions (cp. ibid., p.33). The criticism starts when "Keynes applies his equilibrium system in unmodified form to the analysis of a business cycle sequence" (ibid., p.36), since Keynes bases his proposition on the idea that the possible existence of an equilibrium situation also proves that the actual development will show a tendency towards this position (cp. ibid., pp.26-27; p.35) . 4 However, the tendency towards an eguilibr ium can, according to Lundberg, only be proven by an explicit sequence analysis, which is continuation of his old interest in the 'velocities of adjustment' for an analysis of the adjustment process (cp. sect. V:2; X:l). In this context he opts for Wicksell's "method of combining states of disequilibrium over successive periods" (ibid., p.45 n.l). This is the reason, why the Swedes were always very favourable to the method used by Keynes in the Treatise, which tney saw as an attempt, although perhaps an obscure attempt, to analyse how the discrepancies between plans for savings and investment plans develop into changes in prices and quantities (cp. Lundberg 1948A, pp.55-56; Lundberg 1948B, pp.l63-167; Lindahl 1954, pp.l69-170).
