ABSTRACT
In reviewing Lindahl’s Studies in the Theory of Money and Capital in Economica, Hayek (1940: 332) expressed his ‘intense regret that Professor Lindahl’s ideas should not have become more widely accessible when they were first outlined in Swedish some ten years ago’. Significantly, Hayek ignored the fact that the opening essay, entitled ‘The Dynamic Approach to Economic Theory’, had not previously appeared in print. To Hayek, in fact, the essay that ‘will prove to be of the greatest permanent value’ was not the one just mentioned but an earlier one, which appeared in Swedish in 1929 and was translated in the 1939 volume as ‘The Pricing Problem from the Point of View of Capital Theory’. The reason for Hayek’s preference lay in his lasting interest in what Lindahl had attempted in this essay: ‘to incorporate capital theory into the general theory of prices’. The 1928 essay ‘Intertemporal Price Equilibrium and Movements in the Value of Money’ had been Hayek’s first work aimed at incorporating the economic phenomena related to time into general equilibrium theory. These two essays by Lindahl and Hayek are usually considered the loci where the notion of intertemporal equilibrium was first introduced and discussed (Milgate 1979).
