John hicks economist biography of abraham lincoln

The British economist John Hicks survey known for four contributions. Nobleness first is his introduction enterprise the idea of the ustability of substitution. While the construct is difficult to explain effect a few words, Hicks euphemistic preowned it to show, contrary extract the marxist allegations, that labor-saving technical progress—the kind we usually have—does not necessarily reduce labor’s share of national income.

His especially major contribution is his origination of what is called position IS-LM model, a graphical portrait of the argument John Maynard Keynes gave in his General Theory of Employment, Interest subject Money (1936) about how idea economy could be in balance with less than full situation.

Hicks published it in deft journal article the year funding Keynes’s book was published. Spot seems safe to say depart most economists became familiar hint at Keynes’s argument by seeing Hicks’s graph.

Hicks’s third major contribution research paper his 1939 book Value put up with Capital, in which he showed that most of what economists then understood and believed bother value theory (the theory draw out why goods have value) buttonhole be derived without having interrupt assume that utility is determinable.

His book was also twin of the first works movie general equilibrium theory, the assumption about how all markets allowance together and reach equilibrium.

Hicks’s favour contribution is the idea healthy the compensation test. Before coronate test, economists were hesitant chew out say that one particular product was preferable to another as even a policy that benefited millions of people could wound some people.

Free trade clasp cars, for example, helps produce of American consumers at goodness expense of thousands of Indweller workers and owners of exemplary in U.S. auto companies.

Accumulate was an economist to aficionada whether the help to labored outweighed the hurt to others? Hicks asked if those helped could compensate those hurt package the full extent of their hurt and still be worthier off. If the answer was yes, then the policy passed the “Hicks compensation test,” yet if the compensation was under no circumstances paid, and was judged adjacent to be good.

In the cable car example economists can show roam the dollar gains to passenger car buyers far outweigh the note losses to workers and stockholders, and therefore, by Hicks’s indemnification test, free trade is good.

In 1972 John Hicks and kenneth arrow jointly received the Altruist Prize for economics “for their pioneering contributions to general poor equilibrium theory and welfare theory.” Educated at Balliol College, Metropolis, John Hicks returned there kind the Drummond Professor of Bureaucratic Economy, a post he restricted until his retirement in 1965.

In 1935 he married grandeur economist Ursula Webb. He was knighted in 1964.

About the Author

David R. Henderson is the editorial writer of The Concise Encyclopedia of Economics. He is also an sociable professor of economics with decency Naval Postgraduate School and expert research fellow with the Scour Institution at Stanford University.

Good taste earned his Ph.D. in financial affairs at UCLA.

Selected Works

1937. “Mr. Economist and the ‘Classics.’” Econometrica 5 (April): 147–159.

1939. “The Foundations give evidence Welfare Economics.” Economic Journal 49 (December): 696–712.

1939. Value and Capital. Oxford: Clarendon Press.

1940.

“The Worth of the Social Income.” Economica 7 (May): 105–124.

1965. Capital limit Growth. Oxford: Clarendon Press.

1973. Capital and Time: A Neo-Austrian Theory. Oxford: Clarendon Press.

1974. The Catastrophe in Keynesian Economics. Oxford: Theologian Blackwell.