Sir John Richards Hicks (8 April 1904 – 20 May 1989) was a British economist. He is considered 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 (1937), which summarised a Keynesian view of macroeconomics. His book Value and Capital (1939) significantly extended general-equilibrium and value theory. The compensated demand function is named the Hicksian demand function in memory of him.
Hicks was born in 1904 in Warwick, England, and was the son of Dorothy Catherine (Stephens) and Edward Hicks, a journalist at a local newspaper.[2]
He was educated at Clifton College (1917–1922)[3] and at Balliol College, Oxford (1922–1926), and was financed by mathematical scholarships. During his school days and in his first year at Oxford, he specialised in mathematics but also had interests in literature and history. In 1923, he moved to Philosophy, Politics and Economics, the "new school" that was just being started at Oxford. He graduated with second-class honors and, as he stated, "no adequate qualification in any of the subjects" that he had studied.[4]
From 1935 to 1938, he lectured at Cambridge where he was also a fellow of Gonville & Caius College. He was occupied mainly in writing Value and Capital, which was based on his earlier work in London. From 1938 to 1946, he was Professor at the University of Manchester. There, he did his main work on welfare economics, with its application to social accounting.
Hicks's early work as a labour 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 generalised 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 formalised 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.
Contributions to interpretation of income for accounting purposes
Hicks's influential discourse on income sets the basis for its subjectivity but relevancy for accounting purposes. He aptly summarized it as follows. “The purpose of income calculations in practical affairs is to give people an indication of the amount they can consume without impoverishing themselves”.[9]
Formally, he defined income precisely in three measures:
Hicks's number 1 measure of income: “the maximum amount, which can be spent during a period if there is to be an expectation of maintaining intact the capital value of prospective receipts (in money terms)” (Hicks, 1946, p. 173)[10]
Hicks's number 2 measure of income (market price-neutral): "the maximum amount the individual can spend during a week, and still expect to be able to spend the same amount in each ensuing week” (Hicks, 1946, p. 174).[10]
Hicks's number 3 measure of income (takes into account market prices): “the maximum amount of money which an individual can spend this week, and still expect to be able to spend the same amount in real terms in each ensuing week” (Hicks, 1946, p. 174)[10]
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 Press.
1956. A Revision of Demand Theory. Oxford: Clarendon Press.
1958. "The Measurement of Real Income," Oxford Economic Papers.
1959. Essays in World Economics. Oxford: Clarendon Press.
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 Press.
1969. A Theory of Economic History. Oxford: Clarendon Press. Scroll to chapter-preview links.
1970. "Review of Friedman", Economic Journal.
1973. "The Mainspring of Economic Growth", Nobel Lectures, Economics 1969–1980, Editor Assar Lindbeck, World Scientific Publishing Co., Singapore, 1992.
1973. Autobiography for Nobel Prize
1973. Capital and Time: A Neo-Austrian Theory. Oxford, Clarendon Press.
1974. "Capital Controversies: Ancient and Modern", American Economic Review.
1974. The Crisis in Keynesian Economics. New York, Basic Books.
1975. "What Is Wrong with Monetarism", Lloyds Bank Review.
1979. "The Formation of an Economist." Banca Nazionale del Lavoro Quarterly Review, no. 130 (September 1979): 195–204.
1979. Causality in Economics. Oxford: Basil Blackwell.
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.
1989. A Market Theory of Money. Oxford University Press.
References
^The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1972. Nobelprize.org. Retrieved on 28 July 2013.
^Creedy, John (2011). John and Ursula Hicks(PDF). Department of Economics, The University of Melbourne. ISBN9780734044761.
^"Clifton College Register" Muirhead, J.A.O. p357: Bristol; J.W Arrowsmith for Old Cliftonian Society; April, 1948
^John R. Hicks – Biographical. Nobelprize.org (20 May 1989). Retrieved on 2013-07-28.
^ ab"Sir John Hicks". London School of Economics. 13 March 2009. Retrieved 8 July 2012.
^john hicks – British Academy Retrieved 15 January 2018.
^Hicks, J. R. (1937). "Mr. Keynes and the 'Classics', A Suggested Interpretation". Econometrica. 5 (2): 147–159. doi:10.2307/1907242. JSTOR 1907242.
^Hicks, J. R. (1980). "'IS-LM': An Explanation". Journal of Post Keynesian Economics. 3 (2): 139–154. doi:10.1080/01603477.1980.11489209. JSTOR 4537583.
^Procházka, David (2009). "The Hicks' Concept of Income and Its Relevancy for Accounting Purposes". European Financial and Accounting Journal. 2009 (1): 37–60. doi:10.18267/j.efaj.62.
^ abcProcházka, David (2009). "The Hicks' Concept of Income and Its Relevancy for Accounting Purposes". European Financial and Accounting Journal. 2009 (1): 37–60. doi:10.18267/j.efaj.62.
Sen, Amartya; Zamagni, Stefano; Scazzieri, Roberto (2008). Markets, money and capital: Hicksian economics for the twenty-first century. Cambridge, UK New York: Cambridge University Press. ISBN9780521873215.
External links
Wikimedia Commons has media related to John Hicks.
John R. Hicks on Nobelprize.org
Wikiquote has quotations related to John Hicks.
John Hicks page on the History of Economic Thought website.
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For other people named John Hicks see John Hicks disambiguation Sir John Richards Hicks 8 April 1904 20 May 1989 was a British economist He is considered 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 1937 which summarised a Keynesian view of macroeconomics His book Value and Capital 1939 significantly extended general equilibrium and value theory The compensated demand function is named the Hicksian demand function in memory of him Sir John HicksHicks in 1972BornJohn Richard Hicks 1904 04 08 8 April 1904Warwick England UKDied20 May 1989 1989 05 20 aged 85 Blockley England UKInstitutionGonville and Caius College CambridgeLondon School of EconomicsUniversity of ManchesterNuffield College OxfordSchool ortraditionNeo Keynesian economicsAlma materBalliol College OxfordInfluencesLeon Walras Friedrich Hayek Lionel Robbins Erik Lindahl John Maynard KeynesContributionsIS LM modelCapital theory consumer theory general equilibrium theory welfare theory induced innovationAwardsNobel Memorial Prize in Economic Sciences 1972 Information at IDEAS RePEcIn 1972 he received the Nobel Memorial Prize in Economic Sciences jointly for his pioneering contributions to general equilibrium theory and welfare theory 1 Contents 1 Early life 2 Career 3 Later life 4 Contributions to economic analysis 5 Contributions to interpretation of income for accounting purposes 6 See also 7 Selected publications 8 References 9 Further reading 10 External linksEarly life EditHicks was born in 1904 in Warwick England and was the son of Dorothy Catherine Stephens and Edward Hicks a journalist at a local newspaper 2 He was educated at Clifton College 1917 1922 3 and at Balliol College Oxford 1922 1926 and was financed by mathematical scholarships During his school days and in his first year at Oxford he specialised in mathematics but also had interests in literature and history In 1923 he moved to Philosophy Politics and Economics the new school that was just being started at Oxford He graduated with second class honors and as he stated no adequate qualification in any of the subjects that he had studied 4 Career EditFrom 1926 to 1935 Hicks lectured at the London School of Economics and Political Science 5 He started as a labour economist and did descriptive work on industrial relations but gradually he moved over to the analytical side where his mathematics background returned to the fore Hicks s influences included Lionel Robbins and such associates as Friedrich von Hayek R G D Allen Nicholas Kaldor Abba Lerner and Ursula Webb the last of whom in 1935 became his wife From 1935 to 1938 he lectured at Cambridge where he was also a fellow of Gonville amp Caius College He was occupied mainly in writing Value and Capital which was based on his earlier work in London From 1938 to 1946 he was Professor at the University of Manchester There 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 1952 then as Drummond Professor of Political Economy 1952 1965 and finally as a research fellow of All Souls College 1965 1971 where he continued writing after his retirement Later life EditHicks was knighted in 1964 and became an honorary fellow of Linacre College He was co recipient of the Nobel Prize in Economic Sciences with Kenneth J Arrow in 1972 He donated the Nobel Prize to the London School of Economics and Political Science s Library Appeal in 1973 5 He died on 20 May 1989 at his home in the Cotswold village of Blockley 6 Contributions to economic analysis EditHicks s early work as a labour 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 generalised 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 formalised 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 Hicks s most familiar contribution in macroeconomics was the Hicks Hansen IS LM model 7 published in his paper Mr Keynes and the Classics a suggested interpretation This model formalised an interpretation of the theory of John Maynard Keynes see Keynesian economics and describes the economy as a balance between three commodities money consumption and investment Hicks himself wavered in his acceptance of his IS LM formulation in a paper published in 1980 he dismissed it as a classroom gadget 8 Contributions to interpretation of income for accounting purposes EditHicks s influential discourse on income sets the basis for its subjectivity but relevancy for accounting purposes He aptly summarized it as follows The purpose of income calculations in practical affairs is to give people an indication of the amount they can consume without impoverishing themselves 9 Formally he defined income precisely in three measures Hicks s number 1 measure of income the maximum amount which can be spent during a period if there is to be an expectation of maintaining intact the capital value of prospective receipts in money terms Hicks 1946 p 173 10 Hicks s number 2 measure of income market price neutral the maximum amount the individual can spend during a week and still expect to be able to spend the same amount in each ensuing week Hicks 1946 p 174 10 Hicks s number 3 measure of income takes into account market prices the maximum amount of money which an individual can spend this week and still expect to be able to spend the same amount in real terms in each ensuing week Hicks 1946 p 174 10 See also EditHicksian demand function Hicks optimality Hicks neutral technical change List of economists Nobel Prize in EconomicsSelected publications Edit1932 2nd ed 1963 The Theory of Wages London Macmillan 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 Press 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 Press 1956 A Revision of Demand Theory Oxford Clarendon Press 1958 The Measurement of Real Income Oxford Economic Papers 1959 Essays in World Economics Oxford Clarendon Press 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 Press 1969 A Theory of Economic History Oxford Clarendon Press Scroll to chapter preview links 1970 Review of Friedman Economic Journal 1973 The Mainspring of Economic Growth Nobel Lectures Economics 1969 1980 Editor Assar Lindbeck World Scientific Publishing Co Singapore 1992 1973 Autobiography for Nobel Prize 1973 Capital and Time A Neo Austrian Theory Oxford Clarendon Press 1974 Capital Controversies Ancient and Modern American Economic Review 1974 The Crisis in Keynesian Economics New York Basic Books 1975 What Is Wrong with Monetarism Lloyds Bank Review 1976 Economic Perspectives Oxford Clarendon Press 1979 The Formation of an Economist Banca Nazionale del Lavoro Quarterly Review no 130 September 1979 195 204 1979 Causality in Economics Oxford Basil Blackwell 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 1989 A Market Theory of Money Oxford University Press References Edit The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1972 Nobelprize org Retrieved on 28 July 2013 Creedy John 2011 John and Ursula Hicks PDF Department of Economics The University of Melbourne ISBN 9780734044761 Clifton College Register Muirhead J A O p357 Bristol J W Arrowsmith for Old Cliftonian Society April 1948 John R Hicks Biographical Nobelprize org 20 May 1989 Retrieved on 2013 07 28 a b Sir John Hicks London School of Economics 13 March 2009 Retrieved 8 July 2012 john hicks British Academy Retrieved 15 January 2018 Hicks J R 1937 Mr Keynes and the Classics A Suggested Interpretation Econometrica 5 2 147 159 doi 10 2307 1907242 JSTOR 1907242 Hicks J R 1980 IS LM An Explanation Journal of Post Keynesian Economics 3 2 139 154 doi 10 1080 01603477 1980 11489209 JSTOR 4537583 Prochazka David 2009 The Hicks Concept of Income and Its Relevancy for Accounting Purposes European Financial and Accounting Journal 2009 1 37 60 doi 10 18267 j efaj 62 a b c Prochazka David 2009 The Hicks Concept of Income and Its Relevancy for Accounting Purposes European Financial and Accounting Journal 2009 1 37 60 doi 10 18267 j efaj 62 Further reading EditChristopher Bliss 1987 2008 Hicks John Richard 1904 1989 The New Palgrave A Dictionary of Economics Abstract Sen Amartya Zamagni Stefano Scazzieri Roberto 2008 Markets money and capital Hicksian economics for the twenty first century Cambridge UK New York Cambridge University Press ISBN 9780521873215 External links Edit Wikimedia Commons has media related to John Hicks John R Hicks on Nobelprize org Wikiquote has quotations related to John Hicks John Hicks page on the History of Economic Thought website Works by or about John Hicks at Internet ArchiveAwardsPreceded bySimon Kuznets Laureate of the Nobel Memorial Prize in Economics1972 Served alongside Kenneth J Arrow Succeeded byWassily LeontiefProfessional and academic associationsPreceded byL F Behrens President of the Manchester Statistical Society1944 46 Succeeded bySir Kenneth Lee Bt Retrieved from https en wikipedia org w index php title John Hicks amp oldid 1116181554, wikipedia, wiki, book, books, library,
