ABSTRACT
This method was first developed by Hayek in 1928 followed by Lindahl in 1929 (cp. Milgate 1979, p.l; sect. IV:2:3a:l), and it played an important role in Hayek's subsequent work in the 1930s while it was almost immediately given up by Lindahl. However, the notion only became widespread within the economic profession in the 1960s, but it had already been given a strict mathematical formulation by economists like Arrow and Debreu in the mid 1950s.13 The demise of this notion probably started in the late 1960s when a younger generation of mathematical economists began to question its validity for analysing problems involving uncertainty and money (cp. Hahn 1973, pp.l5-16), and different versions of temporary equilibrium were constructed to cope with these problems (cp. Weintraub 1979, p.l02). From our point of view, it is particularly interesting to notice that Lindahl gave up the use of interternporal equilibrium as early as 1930 for very much the same reason, and he formulated instead a notion of temporary equilibrium.
