Born in Stockholm, he obtained his Ph.D. from Northwestern in 1967. Partly under the influence of Robert Clower, Leijonhufvud produced a dissertation which was to profoundly affect macroeconomics for the next decade: On Keynesian Economics and the Economics of Keynes (1968).
Perhaps the first serious scholarly study of Keynes's work, Leijonhufvud's book differentiated between "Keynesian Economics" (Hicks-Samuelson type of synthesis) and "Economics of Keynes" (the work of J.M. Keynes) and essentially demonstrated that the two had little in common. He joined Clower in calling for a dynamic, "microfounded" formulation of Keynesian theory which explained underemployment equilibrium rather than merely referring to it as an imperfection. In particular, Leijonhufvud relies on differing speeds of quantity and price adjustments to create the coordination failures which yield protracted unemployment.
His later work in the 1970s and 1980s still mirrored this quest. In the 1990s, Clower and Leijonhufvud identified the fast-growing evolutionary theory and computational economics as moving in the right direction and founded a fledgling school, "Post Walrasian", intent on harnessing macroeconomics to it.
Major works of Axel Leijonhufvud
Resources on Axel Leijonhufvud