“Investment of capital, to yield its fruit in the future, must be based on expectations, of opportunities in the future. When I put this to Hayek, he told me that this was indeed the direction in which he had been thinking. Hayek gave me a copy of a paper on 'intertemporal equilibrium', which he had written some years before his arrival in London; the conditions for a perfect foresight equilibrium were there set out in a very sophisticated manner.”
Source: Money, Interest and Wages, (1982), p. 6
Context: I remember Robbins asking me if I could turn the Hayek model into mathematics... it began to dawn on me that... the model must be better specified. It was claimed that, if there were no monetary disturbance, the system would remain in 'equilibrium'. What could such an equilibrium mean? This, as it turned out, was a very deep question; I could do no more, in 1932, than make a start at answering it. I began by looking at what had been said by... Pareto and Wicksell. Their equilibrium was a static equilibrium, in which neither prices nor outputs were changing... That, clearly, would not do for Hayek. His 'equilibrium' must be progressive equilibrium, in which real wages, in particular, would be rising, so relative prices could not remain unchange … The next step in my thinking, was … equilibrium with perfect foresight. Investment of capital, to yield its fruit in the future, must be based on expectations, of opportunities in the future. When I put this to Hayek, he told me that this was indeed the direction in which he had been thinking. Hayek gave me a copy of a paper on 'intertemporal equilibrium', which he had written some years before his arrival in London; the conditions for a perfect foresight equilibrium were there set out in a very sophisticated manner.
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John Hicks 14
British economist 1904–1989Related quotes

John Hicks, The Theory of Wages, 2nd Edition (1963), p. 307

Chap. IX
The Interesting Narrative of the Life of Olaudah Equiano, or Gustavus Vassa, the African (1789)
“Hayek is a puzzle. Certainly he started out as one for me, now some twenty-odd years ago.”
Introduction
Hayek's Challenge: An Intellectual Biography of F. A. Hayek (2004)
Hayek's Journey: The Mind of Friedrich Hayek (2003)
János Kornai, in "An Interview with János Kornai : Interviewed by Olivier Blanchard", Macroeconomic Dynamics, 1999

On the end of the Cold War, in part 7: The End of the Cold War http://globetrotter.berkeley.edu/conversations/LWSmith/lwsmith-con02.html
Interview at USC Berkeley (1997)
Part I, Chapter 4, Professional Reservations, p. 76
The Death of Economics (1994)