in full BERTIL GOTTHARD OHLIN (b. April 23, 1899,
Klippan, Sweden--d. Aug. 3, 1979, Vålädalen), Swedish
economist and political leader who is known as the founder of
the modern theory of the dynamics of trade. In 1977 he shared
the Nobel Prize for Economics with James Meade.
Ohlin studied at the University of Lund and at Stockholm University
under Eli Heckscher. His interest in international trade developed
early, and he presented in 1922 a thesis on trade theory. Ohlin
studied for a period at both the University of Oxford and Harvard
University; at the latter institution he was influenced by Frank
Taussig and John H. Williams. He obtained his doctorate from Stockholm
University in 1924 and the following year became a professor at
the University of Copenhagen. In 1930 he succeeded Heckscher at
Stockholm University. At this time Ohlin became engaged in a controversy
with John Maynard Keynes, contradicting the latter's view that
Germany could not pay war reparations. This debate over reparations
had much influence on the modern theory of unilateral international
payments.
In 1933 Ohlin published a work that won him world renown, Interregional
and International Trade. In this Ohlin built upon earlier
work by Heckscher and on the approach in his own doctoral thesis
to provide a theory of the basis of international trade; it is
now known as the Heckscher-Ohlin theory and has become standard.
It also provided the basis for later work on the effects of protection
on real wages. As a member of the "Stockholm school" of economists,
Ohlin developed, from the foundations laid by Knut Wicksell, a
theoretical treatment of macroeconomic policy and the importance
of aggregate demand which anticipated that of Keynes.
Ohlin served as head of the Liberal Party in Sweden from 1944
to 1967. He was a member of the Riksdag (parliament) from 1938
to 1970 and was minister of commerce (1944-45) in Sweden's wartime
government.
Ohlin on the Great Depression. The popular
message in the daily press
Abstract: This paper traces the development
of Bertil Ohlin's views on issues such as the causes of the depression
of the 1930's, policies against the depression, the use of fiscal
and monetary policies, and tariffs and public works to stabilize
the business cycle. We examine about 80 of his articles on the
depression of the 1930’s, published in Stockholms-Tidningen, a
Stockholm daily, between 1926 and 1935. This is a small sample
of Ohlin's total output of more than 2 300 contributions to the
daily press – a number that makes him the most prolific economic
journalist of all Swedish professors of economics in the 20th
century
Our basic result is that Ohlin was an eager but cautious commentator
on current affairs. Initially, he was quite optimistic, underestimating
the depth of the depression. Later, as the depression worsened,
he proposed bolder measures such as increased public works and
public investments as well as an expansionary monetary policy
to fight unemployment. By 1932, Ohlin had adopted a multiplier
approach. He was strongly opposed to cuts in nominal wages and
public expenditures during the depression. Summarizing his views
on the depression in 1934, Ohlin concluded that it was not the
result of any inherent weakness of capitalism.
Turning to the perennial debate on the originality of the Stockholm
School: Do Ohlin´s daily articles show him as a pioneer or as
an orthodox in macroeconomic thinking in the 1930's? We conclude
that support for either interpretation can be heralded. However,
Ohlin appears more radical in his academic writings than in his
newspaper articles – a view supported by Ohlin himself in his
memoirs.
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