Nicholas Kaldor
Encyclopedia
Nicholas Kaldor, Baron Kaldor (born Káldor Miklós) (12 May 1908 - 30 September 1986) was one of the foremost Cambridge
economists in the post-war period. He developed the famous "compensation" criteria called Kaldor–Hicks efficiency for welfare
comparisons (1939), derived the famous cobweb model
and argued that there were certain regularities that are observable as far as economic growth is concerned (Kaldor's growth laws
)-Kadlor. .Kaldor worked alongside with Gunnar Myrdal
to develop the key concept Circular Cumulative Causation , a multi-causal approach where the core variables and their linkages are delineated. Both Myrdal and Kaldor examine circular relationships, where the interdependencies between factors are relatively strong, and where variables interlink in the determination of major processes. Kaldor also coined the term "convenience yield
" related to commodity markets and the so called theory of storage
, which was initially developed by Holbrook Working
.
, and was educated there, as well as in Berlin, and at the London School of Economics
, where he subsequently became a lecturer. After service in World War II, he held a senior post with the Economic Commission for Europe. From 1964, he was an advisor to the Labour
government of the UK and also advised several other countries, producing some of the earliest memoranda regarding the creation of value added tax
. Inter alia, Kaldor was considered, with his fellow-Hungarian Thomas Balogh
, one of the intellectual authors of the 1964-70 Harold Wilson
's government's short-lived "selective employment tax (SET)" designed to tax employment in service sectors while subsidising employment in manufacturing. In 1966, he became professor of economics
at the University of Cambridge
. In 1974, Kaldor was made a life peer
as Baron Kaldor, of Newnham in the City of Cambridge
.
Married to Clarissa Goldsmith, a prominent figure in Cambridge city life, he had four daughters, including Frances Stewart
, Professor of Economic Development at the University of Oxford
, and Mary Kaldor
, Professor of Human Security at the London School of Economics
.
He died in Papworth Everard
, Cambridgeshire
.
Cambridge
The city of Cambridge is a university town and the administrative centre of the county of Cambridgeshire, England. It lies in East Anglia about north of London. Cambridge is at the heart of the high-technology centre known as Silicon Fen – a play on Silicon Valley and the fens surrounding the...
economists in the post-war period. He developed the famous "compensation" criteria called Kaldor–Hicks efficiency for welfare
Welfare
Welfare refers to a broad discourse which may hold certain implications regarding the provision of a minimal level of wellbeing and social support for all citizens without the stigma of charity. This is termed "social solidarity"...
comparisons (1939), derived the famous cobweb model
Cobweb model
The cobweb model or cobweb theory is an economic model that explains why prices might be subject to periodic fluctuations in certain types of markets. It describes cyclical supply and demand in a market where the amount produced must be chosen before prices are observed. Producers' expectations...
and argued that there were certain regularities that are observable as far as economic growth is concerned (Kaldor's growth laws
Kaldor's growth laws
Kaldor's growth laws are a series of three laws relating to the causation of economic growth.Looking at the countries of the world now and through time Nicholas Kaldor noted the a high correlation between living standards and the share of resources devoted to industrial activity, at least up to...
)-Kadlor. .Kaldor worked alongside with Gunnar Myrdal
Gunnar Myrdal
Karl Gunnar Myrdal was a Swedish Nobel Laureate economist, sociologist, and politician. In 1974, he received the Nobel Memorial Prize in Economic Sciences with Friedrich Hayek for "their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the...
to develop the key concept Circular Cumulative Causation , a multi-causal approach where the core variables and their linkages are delineated. Both Myrdal and Kaldor examine circular relationships, where the interdependencies between factors are relatively strong, and where variables interlink in the determination of major processes. Kaldor also coined the term "convenience yield
Convenience yield
A convenience yield is an adjustment to the cost of carry in the non-arbitrage pricing formula for forward prices in markets with trading constraints....
" related to commodity markets and the so called theory of storage
Theory of storage
The Theory of Storage describes features observed in commodity markets:When inventory levels of the commodity in question are high:* Futures prices tend to be in contango* The volatility of spot and futures prices tend to be low, and equal...
, which was initially developed by Holbrook Working
Holbrook Working
Holbrook Working , a professor of economics and statistics at Stanford University’s FoodResearch Institute, is known for his contributions on hedging, the theory of futures prices – which anticipated the efficient market hypothesis, an early theory of market maker behavior, and the theory of...
.
Life
He was born Káldor Miklós in BudapestBudapest
Budapest is the capital of Hungary. As the largest city of Hungary, it is the country's principal political, cultural, commercial, industrial, and transportation centre. In 2011, Budapest had 1,733,685 inhabitants, down from its 1989 peak of 2,113,645 due to suburbanization. The Budapest Commuter...
, and was educated there, as well as in Berlin, and at the London School of Economics
London School of Economics
The London School of Economics and Political Science is a public research university specialised in the social sciences located in London, United Kingdom, and a constituent college of the federal University of London...
, where he subsequently became a lecturer. After service in World War II, he held a senior post with the Economic Commission for Europe. From 1964, he was an advisor to the Labour
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...
government of the UK and also advised several other countries, producing some of the earliest memoranda regarding the creation of value added tax
Value added tax
A value added tax or value-added tax is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the "value added" to a product, material or service, from an accounting point of view, by this stage of its...
. Inter alia, Kaldor was considered, with his fellow-Hungarian Thomas Balogh
Thomas Balogh
Thomas Balogh, Baron Balogh was a Hungarian economist and member of the British House of Lords....
, one of the intellectual authors of the 1964-70 Harold Wilson
Harold Wilson
James Harold Wilson, Baron Wilson of Rievaulx, KG, OBE, FRS, FSS, PC was a British Labour Member of Parliament, Leader of the Labour Party. He was twice Prime Minister of the United Kingdom during the 1960s and 1970s, winning four general elections, including a minority government after the...
's government's short-lived "selective employment tax (SET)" designed to tax employment in service sectors while subsidising employment in manufacturing. In 1966, he became professor of economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
at the University of Cambridge
University of Cambridge
The University of Cambridge is a public research university located in Cambridge, United Kingdom. It is the second-oldest university in both the United Kingdom and the English-speaking world , and the seventh-oldest globally...
. In 1974, Kaldor was made a life peer
Life peer
In the United Kingdom, life peers are appointed members of the Peerage whose titles cannot be inherited. Nowadays life peerages, always of baronial rank, are created under the Life Peerages Act 1958 and entitle the holders to seats in the House of Lords, presuming they meet qualifications such as...
as Baron Kaldor, of Newnham in the City of Cambridge
Cambridge
The city of Cambridge is a university town and the administrative centre of the county of Cambridgeshire, England. It lies in East Anglia about north of London. Cambridge is at the heart of the high-technology centre known as Silicon Fen – a play on Silicon Valley and the fens surrounding the...
.
Married to Clarissa Goldsmith, a prominent figure in Cambridge city life, he had four daughters, including Frances Stewart
Frances Stewart
Frances Julia Stewart is Professor of Development Economics and Director of the Centre for Research on Inequality, Human Security and Ethnicity , University of Oxford. A pre-eminent development economist, she was named one of fifty outstanding technological leaders for 2003 by Scientific American...
, Professor of Economic Development at the University of Oxford
University of Oxford
The University of Oxford is a university located in Oxford, United Kingdom. It is the second-oldest surviving university in the world and the oldest in the English-speaking world. Although its exact date of foundation is unclear, there is evidence of teaching as far back as 1096...
, and Mary Kaldor
Mary Kaldor
Mary Kaldor is a British academic, currently Professor of Global Governance at the London School of Economics, where she is also the Director of its Centre for the Study of Global Governance. She has been a key figure in the development of cosmopolitan democracy...
, Professor of Human Security at the London School of Economics
London School of Economics
The London School of Economics and Political Science is a public research university specialised in the social sciences located in London, United Kingdom, and a constituent college of the federal University of London...
.
He died in Papworth Everard
Papworth Everard
Papworth Everard is a village in Cambridgeshire, England. It lies ten miles west of Cambridge and six miles south of Huntingdon, having along its centre Ermine Street, the old North Road, the Roman highway that for centuries served as a major artery from London to York, which is now the A1198...
, Cambridgeshire
Cambridgeshire
Cambridgeshire is a county in England, bordering Lincolnshire to the north, Norfolk to the northeast, Suffolk to the east, Essex and Hertfordshire to the south, and Bedfordshire and Northamptonshire to the west...
.
Works
- The Case Against Technical Progress, 1932, Economica
- The Determinateness of Static Equilibrium, 1934, RES
- The Equilibrium of the Firm, 1934, EJ
- Market Imperfection and Excess Capacity, 1935, Economica
- Pigou on Money Wages in Relation to Unemployment, 1937, EJ
- 1939, Welfare propositions of economics and interpersonal comparisons of utility. Economic Journal 49:549–52.
- Speculation and Economic Stability, 1939, RES
- Capital Intensity and the Trade Cycle, 1939, Economica
- A Model of the Trade Cycle, 1940, EJ
- Professor Hayek and the Concertina Effect, 1942, Economica
- The Relation of Economic Growth and Cyclical Fluctuations, 1954 EJ
- An Expenditure Tax, 1955.
- Alternative Theories of Distribution, 1956, RES
- A Model of Economic Growth, 1957, EJ
- Monetary Policy, Economic Stability, and Growth, 1958.
- Economic Growth and the Problem of Inflation, 1959, Economica.
- A Rejoinder to Mr. Atsumi and Professor Tobin, 1960, RES
- Keynes's Theory of the Own-Rates of Interest, 1960, in Kaldor, 1960.
- Essays on Value and Distribution, 1960.
- Essays on Economic Stability and Growth, 1960.
- Capital Accumulation and Economic Growth, 1961, in Lutz, editor, Theory of Capital
- A New Model of Economic Growth, with James A. Mirrlees, 1962, RES
- The Case for a Commodity Reserve Currency, with A.G. Hart and J. Tinbergen, 1964, UNCTAD
- Essays on Economic Policy, 1964, two volumes.
- Causes of the Slow Rate of Economic Growth in the UK, 1966.
- The Case for Regional Policies, 1970, Scottish JE.
- The New Monetarism, 1970, Lloyds Bank Review
- Conflicts in National Economic Objectives, 1970, EJ
- The Irrelevance of Equilibrium Economics, 1972, EJ
- What is Wrong with Economic Theory, 1975, QJE
- Inflation and Recession in the World Economy, 1976, EJ
- Equilibrium Theory and Growth Theory, 1977, in Boskin, editor, Economics and Human Welfare.
- Capitalism and Industrial Development, 1977, Cambridge JE
- Further Essays on Economic Theory, 1978.
- The Role of Increasing Returns, Technical Progress and Cumulative Causation..., 1981, Economie Appliquee
- Fallacies on Monetarism, 1981, Kredit und Kapital.
- The Scourge of Monetarism, 1982.
- The Role of Commodity Prices in Economic Recovery, 1983, Lloyds Bank Review
- Keynesian Economics After Fifty Years, 1983, in Trevithick and WorswickG.D.N. WorswickG.D.N. Worswick was an Oxford economist specialising in understanding of the UK's economy from a Keynesian perspective....
, editors, Keynes and the Modern World - Economics Without Equilibrium, 1985.
External links
- The Scourge of Monetarism (1982)
- Biography
- Kaldor Business Cycle Model by Elmer G. Wiens