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John Hicks
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Sir John Richard Hicks (April 8, 1904 May 20, 1989) was one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the field of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model, which summarised a Keynesian view of macroeconomics. In 1972, Hicks was awarded the Nobel Memorial Prize in Economic Sciences with Kenneth Arrow for "pioneering contributions to general economic equilibrium theory and welfare theory."
s taught at the London School of Economics from 1926 to 1935.
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Sir John Richard Hicks (April 8, 1904 May 20, 1989) was one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the field of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model, which summarised a Keynesian view of macroeconomics. In 1972, Hicks was awarded the Nobel Memorial Prize in Economic Sciences with Kenneth Arrow for "pioneering contributions to general economic equilibrium theory and welfare theory."
Timeline
- He was born in 1904 at Warwick, England.
- He was educated at Clifton College (1917-22) and at Balliol College, Oxford (1922-26), an expensive education financed by mathematical scholarships.
- During his school days, and in his first year at Oxford, he was a mathematical specialist. But he was not contented with mathematics; he had interests in literature and in history which he needed to satisfy.
- 1923: He moved to "Philosophy, Politics and Economics", the "new school" just being started at Oxford; however he did not have adequate qualification in any of the subjects that he had studied.
- Economists, in those days (1930s), were very scarce, so he did pick up a temporary lectureship at the London School of Economics and Political Science and managed to get continued. He started as a labour economist, doing descriptive work on industrial relations, but gradually he moved over to the analytical side. He found that his mathematics, by that time almost forgotten, could be revived, and was sufficient to cope with what anyone used in economics.
- 1935: He married Ursula Webb.
- 1935 – 1938: He lectured at Cambridge and was mainly occupied in writing Value and Capital, which was based on the work he had done in London.
- 1938 to 1946: He was Professor at the University of Manchester. It was there that he did his main work on welfare economics, with its application to social accounting.
- In 1946 he returned to Oxford, first as a research fellow of Nuffield College (1946-52), then as Drummond Professor of Political Economy (1952-65), and finally as a research fellow of All Souls College (1965-71).
- He was knighted in 1964.
- 1972: He shared the Nobel Prize with Kenneth J. Arrow.
- 1989: John Hicks died on May 20.
Career
Hicks taught at the London School of Economics from 1926 to 1935. He was a lecturer at Cambridge University where he was also a fellow of Gonville & Caius College from 1935 to 38. During this time he was mainly occupied with writing Value and Capital. From 1938 to 1946 Hicks was a Professor at the Victoria University of Manchester. In 1946 he returned to Oxford, first as a research fellow of Nuffield College (1946-1965), then as Drummond Professor of Political Economy (1952-1965), and, after that, research fellow of All Souls College (1965-1971).
Contributions to economic analysis
Hick's early work as a labor economist culminated in The Theory of Wages (1932, 2nd ed. 1963), still considered standard in the field. He collaborated with R G D Allen in two seminal papers on value theory published in 1934.
His magnum opus is Value and Capital published in 1939. The book built on ordinal utility and mainstreamed the now-standard distinction between the substitution effect and the income effect for an individual in demand theory for the 2-good case. It generalized the analysis to the case of one good and a composite good, that is, all other goods. It aggregated individuals and businesses through demand and supply across the economy. It anticipated the aggregation problem, most acutely for the stock of capital goods. It introduced general equilibrium theory to an English-speaking audience, refined the theory for dynamic analysis, and for the first time attempted a rigorous statement of stability conditions for general equilibrium. In the course of analysis Hicks formalized comparative statics. In the same year, he also developed the famous "compensation" criterion called Kaldor-Hicks efficiency for welfare comparisons of alternative public policies or economic states.
His most familiar contribution in macroeconomics was the Hicks-Hansen IS-LM model, which formalised an interpretation of the theory of John Maynard Keynes (see Keynesianism). The model describes the economy as a balance between three commodities: money, consumption and investment. Hicks himself did not embrace the theory as he interpretted it; and, in a paper published in 1980, Hicks asserted that it had omitted some crucial components of Keynes's arguments, especially those related to uncertainty.
See also
Selected publications
- 1932, 2nd ed., 1963. The Theory of Wages. London, Macmillan. (Here, doctor Hicks proposed the macroeconomic hypothesis about induced innovation: "a change in the relative prices of the factors of production is itself a spur to invention, and to invention of a particular kind —directed to economizing the use of a factor which has become relatively expensive."
- 1934. A Reconsideration of the Theory of Value, with R. G. D. Allen, Economica.
- 1937. Mr Keynes and the Classics: A suggested interpretation. Econometrica.
- 1939. "The Foundations of Welfare Economics", Economic Journal.
- 1939, 2nd ed. 1946. Value and Capital. Oxford: Clarendon.
- 1940. "The Valuation of Social Income," Economica, 7:105–24.
- 1941. "The Rehabilitation of Consumers' Surplus," Review of Economic Studies.
- 1942. The Social Framework: An Introduction to Economics.
- 1950. A Contribution to the Theory of the Trade Cycle, Oxford: Clarendon.
- 1956. A Revision of Demand Theory, Oxford: Clarendon.
- 1958. "The Measurement of Real Income," Oxford Economic Papers.
- 1959. Essays in World Economics, Oxford: Clarendon.
- 1961. "Measurement of Capital in Relation to the Measurement of Other Economic Aggregates", in Lutz and Hague, editors, Theory of Capital.
- 1965. Capital and Growth. Oxford: Clarendon.
- 1969. A Theory of Economic History. Oxford: Clarendon.
- 1970. "Review of Friedman", Economic Journal.
- 1973. , Nobel Lectures, Economics 1969-1980, Editor Assar Lindbeck, World Scientific Publishing Co., Singapore, 1992.
- 1973.
- 1974. "Capital Controversies: Ancient and Modern", American Economic Review.
- 1975. "What is Wrong with Monetarism", Lloyds Bank Review.
- 1976. Economic Perspectives. Oxford: Clarendon
- 1979, “The Formation of an Economist.” Banca Nazionale del Lavoro Quarterly Review, no. 130 (September 1979): 195-204.
- 1980. "IS-LM: An Explanation," Journal of Post Keynesian Economics.
- 1981. Wealth and Welfare: Vol I. of Collected Essays in Economic Theory. Oxford: Basil Blackwell.
- 1982. Money, Interest and Wages: Vol. II of Collected Essays in Economic Theory. Oxford: Basil Blackwell.
- 1983. Classics and Moderns: Vol. III of Collected Essays in Economic Theory. Oxford: Basil Blackwell.
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