Erik Lindahl was born on 21 November 1891 in Stockholm and died on 6 January 1960 in Uppsala, Sweden.

He was a pioneer of the modern theory of public finance and a leading member of the “Stockholm school” of economics, which in the interwar period elaborated on Knut Wicksell’s approach to macroeconomics and monetary theory.

Lindahl grew up in Jonkoping and then studied humanities and law, from 1910 to 1914, at the University of Lund. He was encouraged by his economics teacher, Emil Sommarin, to study carefully Knut Wicksell’s writings, which became a major source of inspiration for most of his subsequent work. He had, however, no personal contact with Wicksell until the public defence of his doctoral dissertation in 1919, when the latter acted as one of the official “challengers” (Steiger 2008). Lindahl was a docent (reader) in public finance at Lund University from 1920 to 1924, and a reader in economics and fiscal law at the University of Uppsala from 1924 to 1926. In 1926, Lindahl became responsible for the planning of an extensive empirical study on ‘Wages, Cost of Living and National Income in Sweden 1860-1930’, financed by the Rockefeller Foundation and carried out in the following decade at the Institute for Social Sciences at Stockholm University. Thereafter, he held professorial positions at the Gothenburg School of Business Economics (1932-39) and at the Universities of Lund (1939-42) and Uppsala (1942-58). He was a consultant to the Swedish central bank (in 1931) and to the Swedish ministry of finance (1935-43), an economic adviser to the League of Nations (1936-39) and to the United Nations (from 1949-50 and 1952-54), and also served as President of the International Economic Association (1956-59).

Lindahl’s writings, from his doctoral dissertation in 1919 to his last publication in 1959, cover four main areas: public finance, dynamic economic theory (that is, capital theory), macroeconomics, and monetary theory. In public finance, Lindahl’s rigorous application of the benefit principle to taxation facilitated the integration of public eco­nomics and neoclassical economic theory; it also paved the way for integrating public goods into general equilibrium theory. In capital theory, he was the first to provide a mathematical analysis of an “intertemporal equilibrium” and to introduce the concept of a “temporary equilibrium”. In the field of macroeconomic theory, he anticipated some of the insights of Keynes’s General Theory and of the Kaldor-Pasinetti theory of income distribution. In monetary theory he contributed, together with Gunnar Myrdal, to the development of cumulative process analysis. While Lindahl’s main contributions were in the area of pure economic theory, he was also interested in fostering empirical studies of prices and income, and in developing national accounting standards.