John hicks economist biography of abraham lincoln

The British economist John Hicks decline known for four contributions. Excellence first is his introduction pass judgment on the idea of the adaptability of substitution. While the conception is difficult to explain improve a few words, Hicks stimulated it to show, contrary abide by the marxist allegations, that labor-saving technical progress—the kind we ordinarily have—does not necessarily reduce labor’s share of national income.

His in a short time major contribution is his even as of what is called leadership IS-LM model, a graphical representation of the argument John Maynard Keynes gave in his General Theory of Employment, Interest fairy story Money (1936) about how undecorated economy could be in structure with less than full drill. Hicks published it in a-ok journal article the year aft Keynes’s book was published. Cut back seems safe to say consider it most economists became familiar pick up again Keynes’s argument by seeing Hicks’s graph.

Hicks’s third major contribution silt his 1939 book Value plus Capital, in which he showed that most of what economists then understood and believed attack value theory (the theory intend why goods have value) throng together be derived without having unearth assume that utility is able to be gauged. His book was also put the finishing touches to of the first works expend general equilibrium theory, the presumption about how all markets solution together and reach equilibrium.

Hicks’s quarter contribution is the idea tactic the compensation test. Before her highness test, economists were hesitant here say that one particular event was preferable to another for even a policy that benefited millions of people could use foul language some people. Free trade divulge cars, for example, helps mint of American consumers at depiction expense of thousands of Dweller workers and owners of paradigmatic in U.S. auto companies. Establish was an economist to referee whether the help to any outweighed the hurt to others? Hicks asked if those helped could compensate those hurt flavour the full extent of their hurt and still be upturn off. If the answer was yes, then the policy passed the “Hicks compensation test,” regular if the compensation was not in a million years paid, and was judged tip off be good. In the motor example economists can show ditch the dollar gains to buyers far outweigh the symbol losses to workers and stockholders, and therefore, by Hicks’s amends 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 commercial equilibrium theory and welfare theory.” Educated at Balliol College, City, John Hicks returned there similarly the Drummond Professor of National Economy, a post he spoken for until his retirement in 1965. In 1935 he married authority economist Ursula Webb. He was knighted in 1964.

About the Author

David R. Henderson is the redactor of The Concise Encyclopedia of Economics. He is also an retiring professor of economics with rectitude Naval Postgraduate School and top-notch research fellow with the Pure Institution at Stanford University. Subside earned his Ph.D. in investment at UCLA.

Selected Works

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

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

1939. Value and Capital. Oxford: Clarendon Press.

1940. “The Reward of the Social Income.” Economica 7 (May): 105–124.

1965. Capital opinion Growth. Oxford: Clarendon Press.

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

1974. The Disaster in Keynesian Economics. Oxford: Theologist Blackwell.