Hicks John Richard. Economic theory of J.R. Hicks

Equilibrium and welfare economics.

This analysis of the substitution and income effects was carried out using the John Hicks methodology, in which a given level of real income is defined as providing a given level of consumer welfare (a given level of utility). Evgeniy Evgenievich Slutsky, who developed the main provisions of this analysis (his research was carried out two decades earlier, but became known to the world economic community later than Hicks’s results), used a less strict from the point of view of utility theory, but a more empirically easier and therefore more pragmatic way of determining a given level of real income He proposed to consider real income unchanged in the case when, after a price change, the consumer can buy the same set of goods as before the change. Therefore, with Slutsky’s approach, the intermediate budget line must pass through the point depicting the initial optimal set of goods (Fig. 7.9).

English economist and Nobel Prize winner John Hicks proposed dividing technical progress into neutral, labor-saving and capital-saving. Neutral technical progress ensures a simultaneous increase in labor and capital productivity. Labor-saving technical progress ensures savings of both labor and capital, but above all labor. Capital-saving technical progress increases the efficiency of use of both capital and labor, but above all capital.

Hicks, Sir John Richard, 1904-1989

IGOR But we already know this dependence as the law of demand. ANTON Of course, Igor, witches are approaching a more complete understanding of demand in this way. Let's quote the words of John Hicks from his book Cost and Capital A fall in the price of a commodity actually determines the demand for it in two different ways. On the one hand, it makes the consumer richer, increases his “real income”; a fall in price in this sense leads to consequences similar to the consequences of an increase in income. On the other hand, it leads to a change in relative prices, so that regardless of the change in real income, there is a tendency for all other goods to be replaced by the good whose price has decreased. Ultimately, the change in demand is the result of two noted trends.

BARBOS For me, no matter how much you look at this curved line, you will not see anything additional. ANTON Now we will deal with the simultaneous effect on demand of substitution and changes in income, discovered by John Hicks.

John Hicks, English economist, Nobel laureate

Famous scientists John Hicks (Great Britain) and Alvin Hansen (USA) developed a standard equilibrium market model based on Keynesian theory. General equilibrium in the real and money markets is studied using the apparatus of IS-LM curves.

John Hicks (1904-1989, UK) - for research on the theory of general economic equilibrium and welfare theory.

Let us consider the patterns that govern the elasticity of labor demand. British economists Alfred Marshall and John Hicks identified these patterns. The point here is that, other things being equal, the direct wage elasticity of demand for labor of a particular category of workers will be higher under the following conditions

Many Western economists consider profit as a global financial result, since, in their opinion, traditional indicators of gross profit, profitability, net profit do not cover the entire activity of the enterprise, but characterize only certain aspects or the stage of calculation (gross, net profit). The first authors to develop the general concept of global profit were Adam Smith, John Hicks, Jean-Baptiste Sey and others. Adam Smith was the first to characterize profit as the amount that can be spent without encroaching on capital. The global financial result was defined as the increase or decrease in the value of property at constant capital at the beginning and end of the period, assuming that accounts payable were repaid at the beginning and end of the period. English economist and Nobel Prize winner John Hicks clarified this definition, saying that profit is the amount that a person can spend over a certain period of time without changing his income. The novelty of J. Hicks's idea was that he was able to extend the concept of profit, which characterizes the activities of enterprises, to the individual activities of citizens, which was the basis for tax control over the income and expenses of individuals and entrepreneurs without forming a legal entity. If you declare and take inventory of all property at the beginning and end of the taxable period and declare all income for this period, and then organize control over expenses, you can easily establish income hidden from taxation.

John Hicks (1904-1989) believed that profit is what the owner recognizes as such, i.e. what he believes in. This statement is shared by the vast majority of practicing accountants. They are convinced that the profit calculated by them in accordance with the requirements of regulatory documents is the correct profit, unless, of course, they (the accountants) deliberately distorted it. However, Hicks argued that profit is what the owner can consume without worsening his well-being, i.e. believed that the owner can withdraw from the enterprise the entire difference between the final and initial amount of funds invested in the enterprise, which thereby determines the amount of profit.

John Hicks (Hi ks) was the first to construct the LM chart back in 1937. He gave it this name because the chart represents the set of points at which the demand for real money balances, i.e. liquidity L, equals their supply (L /) from the Fed.

The Igraph AS represents the locus of points, including the two points shown in Fig. 20-16. This designation for this graph, like the LM graph, was given by John Hicks in 19)7, who was the first to construct it for a model of an economy without a public sector. Since income is equal to expected expenditure along the IS schedule, it is also true that in a model of an economy without a public sector, the leakage of funds in the form of savings from the income-expenditure stream is equal to the return injection of funds in the form of investment, i.e. / = S hence the term schedule IS.

Another famous neoclassicist was L. Walras. His main work, Elements of Pure Economic Theory (1874), became a kind of charter for exact economic science. It contains a deep economic and mathematical justification for the theory of general equilibrium, which was picked up by new wave economists who made a great contribution to the development and improvement of this problem. These economists included Vilfredo Pareto (1848-1923), Enrique Barone (1859-1924), Gustav Cassel (1866-1945), John Hicks] 904-1988), Abraham Wald (1902-1950), Paul Samuelson (1915) , Kenneth Arrow (1921), Gerard Debreu (1921).

Hicks (Hi ks) John Richard (1904-1989), English economist, Nobel Prize laureate (1972). Educated at Oxford, he taught and researched at the London School of Economics, Manchester and Oxford Universities. Works in general equilibrium theory, welfare economics, business cycle theory, consumption and growth. Hicks came up with the idea of ​​analyzing IS-LM curves, which became one of the important tools of Keynesian theory (otherwise known as the Hicks-Hansen curve). He was awarded the Nobel Prize "for his pioneering contributions to the theory of general economic equilibrium and the theory of welfare."

Keynes's theory and the fiscal policy based on it gained enormous popularity in subsequent years. Most economists and government officials working in the field of macroeconomic problems could call themselves Keynesians. It should be noted that Keynes's General Theory is not written clearly and strictly enough, so it is not always clear what exactly the author meant. Therefore, the further development of Keynesian theory went in different directions. The most influential of them saw Keynesianism as an important but still an addition to neoclassical theory, which explained the possible instability of the economy with inflexible wage rates and a liquidity trap. This direction was called neoclassical synthesis (meaning the synthesis of neoclassicism and Keynesianism). An important role here was played by the English economist John Richard Hicks (1904-89), who built the so-called ISLM model, and the American Paul Samuelson (Samuelson, born in 1915). Other Keynesians (R. Klauer, A. Leijonhufvud, etc.) believed that in the neoclassical synthesis Keynes's teaching was distorted. In their opinion, it, in principle, cannot be synthesized with neoclassical theory, since it comes from a situation of uncertainty and disequilibrium, the expectations of entrepreneurs play a large role in it, and neoclassics, on the contrary, assumes complete information and equilibrium.

HICKS (Hi ks) John (1904-1989), English economist. Works in the field of modeling economic growth, theory of demand, prices. Nobel Prize winner (1972).

ANTON You can also add, as it seems to me, that Pareto proclaimed the rejection of the measurability of utility and proposed to perceive consumer preferences as an observable fact. As John Hicks puts it, Pareto only opens a door into which we may or may not enter. Further development of the ordinalist approach belongs to Evgeniy Evgenievich Slutsky, Roy Allen and John Hicks.

Hicks (Hi ks) John Richard (1904-1989), English economist. Educated at Oxford. He taught at the London School of Economics (1926-35). He was engaged in scientific research at Cambridge (1935-38) and Oxford (1946-52 and 1965-71). In 1938-46. professor at Manchester, and in 1952-65. Oxford University. Hicks' major works focus on consumer theory, economic growth, monetary theory, and economic history. The most famous was his book Cost and Capital (1939) (Russian translation - 1988).

HICKS (Hi ks) John Richard (b. 8.4. 1904), English economist. Educated at Oxford. He taught at the London School of Economics (192B - 35), led the I.-I. work at Cambridge (1935-38) and Oxford (194I-51, 1965-71), prof. Manchester (1938-40) and Oxford (1952-65) universities.

; received a Master of Arts (M.A.) and taught there, as well as at the London School of Economics and the University of Manchester. His wife Lady Ursula K. Webb (H.), daughter of the famous Fabians S. and B. Webb, was the author of a number of famous works, including “Public Finance in National Income” (Public Finance in National Income, 1939) - co-authored with husband.

Essays

• “The Theory of Wages” (1932);
• “Value and Capital: An Inquiry into some Fundamental Principles of Economic Theory” (1939);
• Essays in World Economics, 1959;
• “Collected essays on economic theory” in 3 volumes. (Collected Essays in Economic Theory, 1981-83).

Links

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Wikipedia has articles about other people with this surname, see Hicks. John Richard Hicks John Richard Hicks Date of birth: April 8, 1904 (1904 04 08) Place of birth: Warwick ... Wikipedia

Sir John Richard Hicks (born April 8, 1904, Warwick, May 20, 1989, Blockley) is an English economist. Winner of the 1972 Nobel Prize "for his pioneering contributions to general equilibrium theory and welfare theory." Studied at Oxford;... ... Wikipedia

Sir John Richard Hicks (born April 8, 1904, Warwick, May 20, 1989, Blockley) is an English economist. Winner of the 1972 Nobel Prize "for his pioneering contributions to general equilibrium theory and welfare theory." Studied at Oxford;... ... Wikipedia

Sir John Richard Hicks (born April 8, 1904, Warwick, May 20, 1989, Blockley) is an English economist. Winner of the 1972 Nobel Prize "for his pioneering contributions to general equilibrium theory and welfare theory." Studied at Oxford;... ... Wikipedia

Sir John Richard Hicks (born April 8, 1904, Warwick, May 20, 1989, Blockley) is an English economist. Winner of the 1972 Nobel Prize "for his pioneering contributions to general equilibrium theory and welfare theory." Studied at Oxford;... ... Wikipedia

Hicks last name. Notable speakers: Bill Hicks (1961 1994) American stand-up comedian and social critic. Hicks, John Richard (1904 1989) English economist. Hicks, David Matthew (b. 1975) Australian, Islamic terrorist. Hicks, ... ... Wikipedia

John Hicks (April 8, 1904, Warwick May 20, 1989, Blockley), English economist, representative of neo-Keynesianism. Works in the field of modeling economic growth, theory of demand, prices. Nobel Prize (1972) ... encyclopedic Dictionary

English economist Keynesian; made major contributions to the theory of general equilibrium, the theory of value, the theory of interest, and the theory of the trade cycle. Main works: Cost and capital Dictionary of business terms. Akademik.ru. 2001... Dictionary of business terms

- (1904 89) English economist, representative of neo-Keynesianism. Works in the field of modeling economic growth, theory of demand, prices. Nobel Prize (1972) ... Big Encyclopedic Dictionary

Books

• Practical Transurfing course in 78 days. Maker of reality. How to defeat your inner dragons. Dreams Come True (set of 4 books), Vadim Zeland, John F. Demartini, Esther and Jerry Hicks. You can find out more detailed information about the books included in the set by following the links: “Practical Transurfing course in 78 days” “Reality Maker” “How to defeat internal…

HICKS, JOHN RICHARD(Hicks, John Richard) (1904–1989), English economist. Born in 1904 in Leamington, he studied at Oxford University and was a student of one of the leaders of the Fabian movement, J. Cole. From 1926 he taught at the London School of Economics. In 1972, together with K. Arrow, he was awarded the Nobel Prize in economic science for his contribution to the development of the theory of general equilibrium and welfare economics.

Hicks's range of scientific interests was quite wide, but his main attention was paid to the study of the fundamental problems of modern economic science - issues of cost, supply and demand, price, wages, capital and profit, economic growth, cyclical development, inflation. Among his most famous works are Wage theory (The Theory of Wages, 1932); Cost and capital (Value and Capital. An Inquiry into Some Fundamental Principles of Economic Theory, 1939); Contributions to trade cycle theory (A Contribution to the Theory of the Trade Cycle, 1950); Essays on the World Economy (Essays in World Economics, 1959); Critical Essays on Monetary Theory (Critical Essays on Monetary Theory, 1967); Theory of economic history (A Theory of Economic History, 1969); Crisis in the development of Keynesian economic theory (The Crisis in Keynesian Economics, 1975); Economic prospects. New essays on money and economic growth (Economic Perspectives. Further Essays on Money and Growth, 1977); Causality in economics (Causality in Economics, 1979). Job Cost and capital soon after its publication it was recognized as a classic by leading Western economists.

Hicks's first major work Wage theory– is devoted to the study of the functioning of the labor market and the mechanism for setting wages in conditions of imperfect competition. Here the scientist outlined his theory of industrial conflict, according to which the theory of wage setting is a special case of the general theory of value, and the main factor that disrupts the free interaction of market forces in the labor market are trade unions. Within the framework of this theory, Hicks tried to prove that wage rates are determined by the intersection of the “concession curve” of entrepreneurs and the “resistance curve” of trade unions, put forward the idea of ​​​​the possibility of substituting labor with capital and the elasticity of such substitution, and defined the neutrality of technical progress, in which innovation does not lead to changing the proportions of product distribution between factors of production. Hicks's work had a significant influence on the subsequent development of production function theory and neoclassical theories of unemployment, in particular the theory of the natural rate of unemployment.

In Hicks's main work, the book Cost and capital– for the first time since A. Marshall, an attempt was made to consistently analyze the foundations of neoclassical theory. The book stands out for the breadth of problems considered and lays the foundations of modern microeconomic theory. The work outlines the foundations of the ordinalist theory of prices and develops the fundamental principles of the general theory of equilibrium. Hicks was the first to raise the question of the stability of competitive equilibrium in large economic systems and proved that many of the most important concepts of the Austrian subjective theory of value, such as the law of diminishing utility, the measurability of the absolute value of utility, etc., are in fact not related to fluctuations in demand and offers on the market.

Hicks made a significant contribution to the theory of cyclic development. The scientist abandoned the psychological concepts of the cycle of A. Pigou and other representatives of the Cambridge school and proposed a theoretical scheme of the cycle, in which he identified 4 main phases. In his interpretation, the cycle is a set of deviations from the equilibrium trajectory of economic development.

Hicks's concept of inflation is most fully expounded in Essays on the World Economy and comes down to the introduction of the concept of “labor standard” and the thesis of the “wages-prices” spiral.

In the 1970s, Hicks devoted much attention to the development of methodological problems in the development of economic theory and the revision of Keynesian economic theory. In several later works, most notably The crisis in the development of Keynesian theory, he clarified and supplemented Keynes’s constructions and statements, abandoned a number of important provisions of his theory and tried to adapt Keynes’ theory to modern conditions, becoming the founder of “Hicksian Keynesianism.”

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MINISTRY OF EDUCATION AND SCIENCE OF THE RUSSIAN FEDERATION

FEDERAL STATE BUDGET EDUCATIONAL INSTITUTION OF HIGHER PROFESSIONAL EDUCATION

"STATE UNIVERSITY-EDUCATIONAL-RESEARCH-PRODUCTION COMPLEX"

Department: “Public Administration and Finance”

Topic: “Nobel laureate in economics John Richard Hicks”

student: Zlotkin E. A.

Introduction

3. Nobel Prize

Conclusion

Introduction

General equilibrium theory has a wide range of applications, in particular, it is used in determining the scientific basis of policies in the field of welfare economics. Welfare economics is a field of economic theory that studies the social acceptability of alternative states of the economy. Welfare economics studies methods of organizing economic activity in a way that maximizes economic well-being. The problem of the well-being of society has been and is the central problem of any economic system. For many years, many scientists have tried to develop criteria for assessing economic efficiency that could be used in assessing the actual state of resources.

The first economists to study this problem interpreted utility as a measurable level of consumer satisfaction. Therefore, when determining changes in the economic well-being of society, they relied on changes in the structure of economic activity. Modern social welfare theory cannot be imagined without John Richard Hicks.

1. Biography of John Richard Hicks

English economist John Richard Hicks was born in Warwick, near Birmingham. His father, Erward Hicks, was a journalist for a local newspaper. At school and during his first year at Clifton College, Oxford, where X. entered in 1917, he specialized in mathematics. From 1922 to 1926 he continued his studies at Balliol College. Also interested in literature and history, X. moved in 1923 to the newly opened School of Philosophy, Politics and Economics at Oxford, but his studies there were without much results. Hicks's academic success did not foreshadow his future achievements in the scientific field and, by his own frank admission, he graduated from the university "with a second-rate degree and without sufficient knowledge in any of the subjects studied."

Xix easily obtained a temporary lectureship at the London School of Economics (LSE). He began to specialize in labor economics and industrial relations analysis, but soon switched to economic theory, discovering that his mathematical training, by then fairly forgotten, could be useful. The greatest influence on the formation of Xix's theoretical views was exerted by the works of the creator of the mathematical method of economic analysis and the theory of general equilibrium, L. Walras and his follower V. Pareto. While working on his first book, “The Theory of Wages” (1932), Xix, in his own words, had a vague idea of ​​\u200b\u200bthe activities of J. M. Keynes and his group at Cambridge. It was only thanks to the discussion around F. von Hayek's book "Prices and Production", which took place at the LSE in 1931, that Xix turned to macroeconomic analysis.

In 1935, X. moved to the staff of Conville and Caius College, University of Cambridge. That same year he married Ursula Webb, an economist at the LSE; For many years, the Hicks spouses worked extensively and creatively together, mainly on economic policy issues. From 1939 to 1946, Xicks was professor of economics at the University of Manchester. There he did his main work in welfare economics. In 1946, X. returned to Oxford, first as a research fellow at Nuffield College. Since 1952 he has been Professor of Political Economy at Oxford University. He remained in this position until his retirement in 1965. During these years, X. carried out work in many areas of economic theory. He wrote on monetary theory, international trade, economic growth, cyclical fluctuations in the economy, and the problems of developing countries, some of which he visited with his wife, who specializes in this field.

Hicks's Theory of Wages (1932) was an attempt to apply the theory of marginal productivity to the analysis of wages. In addition, he brought into the study of this issue the so-called bargaining theory - a softened version of the theory of free competition. Using the "employer's concession" curve and the "union's demands" curve, X. determined the maximum wage that a union could achieve with skillful negotiation between the bargaining parties, arguing that the gain in any case would be nullified, since in the end the principle would prevail ultimate performance. The central place in X.'s analysis is occupied by the thesis about the possibility of interchangeability of capital and labor.

He introduced into economic analysis the concept of “coefficient of interchangeability” (or “elasticity of substitution”) - an indicator that determines the relative ease of replacing one factor of production with another. To show the impact of technological change on wages, a rigorous analysis of the role of invention was undertaken. X. showed that if the coefficient of interchangeability (elasticity factor) is equal to zero, then this indicates the neutrality of inventions that do not change the shares of labor and capital. Labor-saving inventions reduce workers' share of income, which may increase in absolute terms. X. showed. that inventions that make it possible to reduce labor costs particularly sharply and are from this point of view the most profitable, can have a detrimental effect, since in this case there will be both a relative and an absolute reduction in the share of workers. X. was primarily interested in the influence of the relative change in the size of remuneration for each of the factors of production on the quantitative relationships between them in production. Thus, according to X., substitutability becomes significant as soon as a small drop in wages leads to a wider use of labor compared to capital. In this case, the share of the working class in national income increases. At the same time, X. implied conditions of free competition and a fairly quick reaction to changes in the market situation both on the part of labor and on the part of capital, which in itself is very problematic.

Between 1935 and 1938 X. wrote his most significant work, “Value and Capital”. Published in 1939, it was, in a sense, an attempt to develop the theory of general equilibrium of L. Walras and V. Pareto. The book is considered an early British version of Samuelson's Foundations of Economic Analysis. The starting point of X.'s theory was the idea of ​​the subjective nature of value and needs. The initial chapters of the book substantiate what in modern economic theory is called the orthodox theory of behavior of consumers and producers. X. created a logical system rooted in the ideas of free competition in the 18th century. The theory of general equilibrium he created was generally static in nature, since it considered economic dynamics as a successive series of states of static equilibrium. In X.'s theory, the time factor was also absent, so economic dynamics in his analysis essentially remained unexplored.

2. Contribution to economic science

Xicks examined various equilibrium options that reflect the relationship between income levels and consumption patterns. The “income-consumption” curve he constructed corresponded to real price relationships and made it possible to identify patterns of consumer reaction to changes in prices and income, as well as to analyze the behavior of the factor of interchangeability when the consumption structure changes.

Xicks proposed a graph on which, having drawn a utility surface, he plotted curves reflecting the consumer's reaction to two different goods. The graph was a system of indifference curves that reflected the polarity of various combinations of two goods. Each curve decreased as it moved to the right and was convex relative to the origin. Movement along the curve showed mutually compensating changes in the combination of goods. At the same time, it reflected the dynamics of the marginal utility of goods: a larger amount of a good corresponded to a lower marginal utility. By superimposing the price line on the graph, X. obtained the point of its contact with the indifference curve, reflecting the maximum utility under given conditions; movement from this point along the price line will lead the consumer to a lower indifference curve. An important place in the theory of X. was occupied by the position that an increasing quantity of one good compensates for the losses incurred by the consumer due to a decrease in the quantity of another good, and the marginal rate of interchangeability of two goods should be equal to the ratio of their prices, if we mean the establishment of equilibrium with consumer point of view.

Hicks's analysis laid the foundation for subsequent studies of the principle of interchangeability of goods in the study of the relationship between costs and benefits, although he was criticized by P. Samuelson and other economists for the purely formal nature of his calculations, which did not take into account problems of distribution, historical and cultural development of society, as well as various kind of irrational factors influencing the buyer's choice. However, X. remained true to himself and in his work “A Revision of Demand Theory” (1956) outlined an even more abstract version of the doctrine of consumer behavior.

Another contribution to economic science recorded in the book "Cost and Capital" was the analysis of the problem of economic stability within the framework of general equilibrium theory. He proceeded from the fact that the study of static equilibrium is the starting point for the study of imbalances generated by factors of economic dynamics. The instability of the economy, according to X., stems mainly from disturbances in the distribution of income and extreme complementarity of goods. X.'s theory of production covered four markets: goods, factors of production, services and semi-finished products. A market is considered stable if a decrease in price causes demand to exceed supply, even if the prices of all other goods adjust to this new price; market stability will be imperfect if excess demand for a given good is discovered only after the price of all other goods has changed.

Market stability assumed in X.'s theory the isolation of price from all forces operating in the market, and the only reason for the disruption of stability is the dynamics of income. X. proceeded from the assumption of perfect competition, arguing that ignoring the monopoly of government activity and abstracting from the impact of the interest rate does not significantly affect his theory. The conditions for a balanced state of the economy that he developed, despite their isolation from economic realities, were of undoubted value, which was confirmed by subsequent studies by J. Debreu and K. Arrow. One of the key concepts of the dynamic concept of X. - “temporary equilibrium” - is currently widely used in theoretical macroeconomics. X.'s place in modern economic theory is largely due to the methods of analysis he developed, for example, the use of comparative statics and the application of dynamic analysis to the study of economic growth and the trade cycle.

Somewhat later, Xix tried to create a model of a growing economy. This concept is based on the article "A "Value and Capital" Growth Model", published in the Review of Economic Studies in 1959. g., the ideas of the main work of X were laid.

Under the direct influence of the work of J. M. Keynes, “Treatise on Money,” X. turned to the analysis of money. His views in this area were outlined in a very relevant article at the time, “A Suggestion for Simplifying the Theory of Money.” It was published in early 1935 in the magazine "Economica". The main idea was the assertion that money is one of the possible forms of financial assets, and (in conditions, however, of stable prices) the most preferable form. He examined various forms of “holding” assets, finding out the conditions for the preference for cash over various types of securities. The main takeaway was that despite the zero interest rate, money is held in the form of cash because it is the only form of asset that can be used without diminution or loss of value (absent inflation) to make unexpected purchases.

If this article by Hicks has already been almost forgotten, then another, outlining his ideas in the field of monetary theory, “Mr. Keynes and the Classics”, was published in the journal Econometrica. for 1937, left a significant mark. In it, X. presented his famous diagram “Savings for investment - money market (SC-DR)”, which was subsequently included in all macroeconomics textbooks.

Hicks's theory of money and deviation from the DR curve anticipated modern portfolio theories, which were later developed by J. Tobin. X. also showed that an independent increase in government spending will move the UK curve to the right, which means an increase in national income. In this case, the interest rate also increases, except when the DR curve is flat (these cases are known as the Keynesian “liquidity trap”). Based on the fact that it was the “liquidity trap” that characterized the state of money markets during the Great Depression, many Keynesians justified the need to use fiscal policy to stimulate aggregate demand.

Hicks's ideas were actively varied in Keynesian macroeconomics in the 50s and 60s, but Hicks himself did not take part in the controversy surrounding his contribution to the general theory of equilibrium. The debates of these decades in the field of economic policy, contrasting the effectiveness of monetary and fiscal means, were often conducted within the framework of the SC-DR diagram. However, in the early 70s. X's diagram was the subject of attack by a number of Keynesians, including R. Klauer, one of X's former students. X's opponents argued that the SC-DR curves distorted the essentially dynamic and unbalanced nature of J. M. Keynes's theory with their static and balanced character. In fact, X. showed in his theory of the trade cycle in 1950 the dynamic nature of short-term development, especially in relation to determining the size of investment. The SC-DR diagram, if used correctly, remains a fairly reliable tool. Economic historian P. Temin, for example, used it to show that the monetarist explanation of the causes of the Great Depression in the United States (a sharp drop in the supply of money) was refuted by empirical evidence - data on interest rates and national income.

In the 50-60s. Xicks, in a creative union with his wife, focused on the problems of applied economics. Peru Xix has published works on international trade, the British tax system, and the problems of developing countries. Continuing the work begun during World War II, X. and his wife, a specialist in the problems of developing countries, served as advisers to the British government on tax policy. They also assisted the official circles of some former members of the British Commonwealth, such as India and Jamaica, in resolving economic problems that arose after the independence of these countries. X. continued to intensively study issues of economic theory, although much of what he did after the work “Cost and Capital” has not yet been sufficiently comprehended. The book "Capital and Growth" (1965) used the concept of comparative dynamics to study stable and optimal paths of development. In this book, X. introduced into the analysis the concept of markets with “fixed” and “flexible” prices, the distinction between which has proven productive in modern macroeconomics.

In his work “A Theory of Economic History” (1969), X. applied his theory to the analysis of economic history, thereby offering a new perspective on economic reality. He drew attention, for example, to the sequence of events through which the spread of new technology led to economic growth. This idea was developed in the book “Capital and Time” (1973). The work “Causality in Economics” (1979) examined the sequence of economic processes, the difference between economic stocks and flows, and the problem of identifying the causal relationship between changes in economic development.

3. Nobel Prize

In 1972, Xicks shared the Alfred Nobel Prize in Economics with C. Arrow "for his pioneering contributions to general equilibrium theory and welfare theory." In his speech at the presentation of the laureates, a member of the Royal Swedish Academy of Sciences, R. Bentzel, emphasized that the work “Cost and Capital” “breathed new life into the theory of general equilibrium,” and X.’s equilibrium model “gave a more specific character to the equations included in the system, and made it possible to study the effects that arise within a system under the influence of impulses coming from outside."

After his retirement in 1965, X. remained until 1971 as a research fellow at All Souls College, Oxford. He responded eagerly to everything new that appeared in economic science. In the last years of his life, X. published “The Crisis in Keynesian Economics” (1974), “Economic Perspectives: Further Essays on Money and Growth”, 1977), “Wealth and Welfare” (1981), “Money, Interest, and Wages” (1982), “Classics and Moderns” , 1983), “Methods of Dynamic Economics”, 1985.

Conclusion

economic nobel hicks development

Hicks's contribution to economics is difficult to assess. It remains to add that in addition to the Nobel Prize, X. was awarded many honorary scientific titles and awards. He was a member of the British Academy of Sciences, the Royal Swedish Academy of Sciences, the Italian National Academy of Sciences, the American Academy of Arts and Sciences, and honorary doctorates from several British universities (Glasgow, Manchester, Leicester, Warwick, etc.), as well as the Technical University of Lisbon. From 1960 to 1962 he was president of the Royal Economic Society, and in 1964 he was elevated to the rank of nobility.

Bibliography

1. http://ru.wikipedia.org/wiki/Nobel_prize

2. http://ru.wikipedia.org/wiki/Nobel_Prize_in_Economics

3. www.referat.ru

4. http://ru.wikipedia.org/wiki/Alfred_Nobel

5. “Nobel laureates” Gladkov A.A.; DVPI named after. V.V. Kuibyshev, Vladivostok 2007

6. Nobel Prize laureates: Encyclopedia: Trans. from English - M.: Progress, 1992.

7. “Samuelson Paul” http://n-t.ru

10. informike.ru

13. ecfac.ru/nobel/person

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Alfred Nobel's will. The Fields and Abel Prizes are “equivalents” to the Nobel Prize. Jan Tinbergen as Nobel Prize winner in 1969. Laureates of the 1970-2000s, topics of work. The Nobel Prize is the highest degree of recognition of merit.

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The essence of the Nobel Prize in Economics, its establishment. Requirements for persons applying for the Nobel Prize, data on existing prize winners in economics. Chances of Russian economists to receive the Nobel Prize in Economics.

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Awarding Nobel Prizes according to A. Nobel's will. A. Nobel Foundation. Procedures for deciding how to award a prize. Evaluation of the contributions of applicants for the award by numerous experts. Receipt of proposals. Awards ceremony. First prizes.

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Alfred Marshall as the founder of the Cambridge school of marginalism, production cost analysis. The main types of changes leading to the dynamics of the economic system according to J. Clark. Pigou as one of the founders of the economic theory of welfare.

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Disputes in the scientific world over the awarding of the Nobel Prize in Economics. Requirements for nomination of candidates. Stages of selecting the winner of the next award. The merits of V. Leontiev, F. Modigliani, R. Coase, P. Krugman and Jan Tinbergen in economic science.

English scientist, Nobel Prize winner in economics in 1972 together with K. Arrow. In his writings, Hicks showed how the indifference curve can be used to analyze consumer behavior based on ordinal utility (see Ordinal utility). Studying the problems of cyclical economic development (see Business cycle), the scientist demonstrated with the help of mathematical models how an accelerator (see Accelerator) can cause a change in the level of production. Hicks developed the IS-LM model (see IS-LM model) to study the economic equilibrium between the supply and demand for money, between the level of savings and investment, between the interest rate and income.

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HICKS JOHN RICHARD

Nobel Prize in Economics 1972 (shared with Kenneth Arrow)

English economist John Richard Hicks was born in Warwick, near Birmingham. His father, Erward Hicks, was a journalist for a local newspaper. At school and during his first year at Clifton College, Oxford, where X. entered in 1917, he specialized in mathematics. From 1922 to 1926 he continued his studies at Balliol College. Also interested in literature and history, X. moved in 1923 to the newly opened School of Philosophy, Politics and Economics at Oxford, but his studies there were without much results. X.'s academic successes did not foreshadow his future achievements in the scientific field and, by his own frank admission, he graduated from the university “with a second-rate degree and without sufficient knowledge in any of the subjects studied.”

X. easily obtained a temporary lecture course at the London School of Economics (LSE). He began to specialize in labor economics and industrial relations analysis, but soon switched to economic theory, discovering that his mathematical training, by then fairly forgotten, could be useful. The greatest influence on the formation of X.'s theoretical views was exerted by the works of the creator of the mathematical method of economic analysis and the theory of general equilibrium, L. Walras, and his follower V. Pareto. While working on his first book, “The Theory of Wages” (1932), X., in his own words, had a vague idea of ​​​​the activities of J. M. Keynes and his group at Cambridge. Only thanks to the discussion around F. von Hayek's book "Prices and Production", which took place at the LSE in 1931, X. turned to macroeconomic analysis.

In 1935, X. moved to the staff of Conville and Caius College, University of Cambridge. That same year he married Ursula Webb, an economist at the LSE; For many years, the X spouses worked a lot and creatively together, mainly on problems of economic policy. From 1939 to 1946, X. was a professor of economics at the University of Manchester. There he did his main work in welfare economics. In 1946, X. returned to Oxford, first as a research fellow at Nuffield College. Since 1952 he has been Professor of Political Economy at Oxford University. He remained in this position until his retirement in 1965. During these years, X. carried out work in many areas of economic theory. He wrote on monetary theory, international trade, economic growth, cyclical fluctuations in the economy, and the problems of developing countries, some of which he visited with his wife, who specializes in this field.

X.'s work "The Theory of Wages" (1932) was an attempt to apply the theory of marginal productivity to the analysis of wages. In addition, he brought into the study of this issue the so-called bargaining theory - a softened version of the theory of free competition. Using the "employer's concession" curve and the "union's demands" curve, X. determined the maximum wage that a union could achieve with skillful negotiation between the bargaining parties, arguing that the gain in any case would be nullified, since in the end the principle would prevail ultimate performance. The central place in X.'s analysis is occupied by the thesis about the possibility of interchangeability of capital and labor. He introduced into economic analysis the concept of “coefficient of interchangeability” (or “elasticity of substitution”) - an indicator that determines the relative ease of replacing one factor of production with another. To show the impact of technological change on wages, a rigorous analysis of the role of invention was undertaken. X. showed that if the coefficient of interchangeability (elasticity factor) is equal to zero, then this indicates the neutrality of inventions that do not change the shares of labor and capital. Labor-saving inventions reduce workers' share of income, which may increase in absolute terms. X. showed. that inventions that make it possible to reduce labor costs particularly sharply and are from this point of view the most profitable, can have a detrimental effect, since in this case there will be both a relative and an absolute reduction in the share of workers. X. was primarily interested in the influence of the relative change in the size of remuneration for each of the factors of production on the quantitative relationships between them in production. Thus, according to X., substitutability becomes significant as soon as a small drop in wages leads to a wider use of labor compared to capital. In this case, the share of the working class in national income increases. At the same time, X. implied conditions of free competition and a fairly quick reaction to changes in the market situation both on the part of labor and on the part of capital, which in itself is very problematic.

Between 1935 and 1938 X. wrote his most significant work, “Value and Capital”. Published in 1939, it was, in a sense, an attempt to develop the theory of general equilibrium of L. Walras and V. Pareto. The book is considered an early British version of Samuelson's Foundations of Economic Analysis. The starting point of X.'s theory was the idea of ​​the subjective nature of value and needs. The initial chapters of the book substantiate what in modern economic theory is called the orthodox theory of behavior of consumers and producers. X. created a logical system rooted in the ideas of free competition in the 18th century. The theory of general equilibrium he created was generally static in nature, since it considered economic dynamics as a successive series of states of static equilibrium. In X.'s theory, the time factor was also absent, so economic dynamics in his analysis essentially remained unexplored.

X. studied various equilibrium options, reflecting the relationship between income levels and consumption structure. The “income-consumption” curve he constructed corresponded to real price relationships and made it possible to identify patterns of consumer reaction to changes in prices and income, as well as to analyze the behavior of the factor of interchangeability when the consumption structure changes.

X. proposed a graph on which, having drawn a utility surface, he plotted curves reflecting the consumer’s reaction to two different goods. The graph was a system of indifference curves that reflected the polarity of various combinations of two goods. Each curve decreased as it moved to the right and was convex relative to the origin. Movement along the curve showed mutually compensating changes in the combination of goods. At the same time, it reflected the dynamics of the marginal utility of goods: a larger amount of a good corresponded to a lower marginal utility. By superimposing the price line on the graph, X. obtained the point of its contact with the indifference curve, reflecting the maximum utility under given conditions; movement from this point along the price line will lead the consumer to a lower indifference curve. An important place in the theory of X. was occupied by the position that an increasing quantity of one good compensates for the losses incurred by the consumer due to a decrease in the quantity of another good, and the marginal rate of interchangeability of two goods should be equal to the ratio of their prices, if we mean the establishment of equilibrium with consumer point of view.

H.'s analysis laid the foundation for subsequent studies of the principle of interchangeability of goods in the study of the relationship between costs and results, although he was criticized by P. Samuelson and other economists for the purely formal nature of his calculations, which did not take into account problems of distribution, historical and cultural development of society, as well as various kinds of irrational factors influencing the buyer’s choice. However, X. remained true to himself and in his work “A Revision of Demand Theory” (1956) outlined an even more abstract version of the doctrine of consumer behavior.

Another contribution of X. to economic science, recorded in the book “Cost and Capital,” was an analysis of the problem of economic stability within the framework of the theory of general equilibrium. He proceeded from the fact that the study of static equilibrium is the starting point for the study of imbalances generated by factors of economic dynamics. The instability of the economy, according to X., stems mainly from disturbances in the distribution of income and extreme complementarity of goods. X.'s theory of production covered four markets: goods, factors of production, services and semi-finished products. A market is considered stable if a decrease in price causes demand to exceed supply, even if the prices of all other goods adjust to this new price; market stability will be imperfect if excess demand for a given good is discovered only after the price of all other goods has changed. Market stability assumed in X.'s theory the isolation of price from all forces operating in the market, and the only reason for the disruption of stability is the dynamics of income. X. proceeded from the assumption of perfect competition, arguing that ignoring the monopoly of government activity and abstracting from the impact of the interest rate does not significantly affect his theory. The conditions for a balanced state of the economy that he developed, despite their isolation from economic realities, were of undoubted value, which was confirmed by subsequent studies by J. Debreu and K. Arrow. One of the key concepts of the dynamic concept of X. - “temporary equilibrium” - is currently widely used in theoretical macroeconomics. X.'s place in modern economic theory is largely due to the methods of analysis he developed, for example, the use of comparative statics and the application of dynamic analysis to the study of economic growth and the trade cycle.

Somewhat later, X. tried to create a model of a growing economy. The basis for this concept, outlined in the article "A Value and Capital Growth Model", published in the Review of Economic Studies in 1959, was based on the ideas of the main work of X.

Under the direct influence of the work of J. M. Keynes, “Treatise on Money,” X. turned to the analysis of money. His views in this area were outlined in a very relevant article at the time, “A Suggestion for Simplifying the Theory of Money.” It was published in early 1935 in the magazine "Economica". The main idea of ​​X. was the assertion that money is one of the possible forms of financial assets, moreover (in conditions, however, of stable prices) the most preferable form. He examined various forms of “holding” assets, finding out the conditions for the preference for cash over various types of securities. X's main conclusion was that despite the zero interest rate, money is held in the form of cash because it is the only form of asset that can be used without diminution or loss of value (in the absence of inflation) to make unexpected purchases.

If this article by X. is already almost forgotten, then another, outlining his ideas in the field of monetary theory, “Mr. Keynes and the Classics” - in the journal “Econometriсa” ) for 1937, left a significant mark. In it, X. presented his famous diagram “Savings for investment - money market (SC-DR)”, which was subsequently included in all macroeconomics textbooks.

X's theory of money and deviation from the DR curve anticipated modern portfolio theories, which were later developed by J. Tobin. X. also showed that an independent increase in government spending will move the UK curve to the right, which means an increase in national income. In this case, the interest rate also increases, except when the DR curve is flat (these cases are known as the Keynesian “liquidity trap”). Based on the fact that it was the “liquidity trap” that characterized the state of money markets during the Great Depression, many Keynesians justified the need to use fiscal policy to stimulate aggregate demand.

X.'s ideas actively varied in Keynesian macroeconomics in the 50s and 60s, but X. himself did not take part in the controversy surrounding his contribution to the general theory of equilibrium. The debates of these decades in the field of economic policy, contrasting the effectiveness of monetary and fiscal means, were often conducted within the framework of the SC-DR diagram. However, in the early 70s. X's diagram was the subject of attack by a number of Keynesians, including R. Klauer, one of X's former students. X's opponents argued that the SC-DR curves distorted the essentially dynamic and unbalanced nature of J. M. Keynes's theory with their static and balanced character. In fact, X. showed in his theory of the trade cycle in 1950 the dynamic nature of short-term development, especially in relation to determining the size of investment. The SC-DR diagram, if used correctly, remains a fairly reliable tool. Economic historian P. Temin, for example, used it to show that the monetarist explanation of the causes of the Great Depression in the United States (a sharp drop in the supply of money) was refuted by empirical evidence - data on interest rates and national income.

In the 50-60s. X., in a creative union with his wife, focused on the problems of applied economics. Peru X. owns works on international trade, the British tax system, and the problems of developing countries. Continuing the work begun during World War II, X. and his wife, a specialist in the problems of developing countries, served as advisers to the British government on tax policy. They also assisted the official circles of some former members of the British Commonwealth, such as India and Jamaica, in resolving economic problems that arose after the independence of these countries. X. continued to intensively study issues of economic theory, although much of what he did after the work “Cost and Capital” has not yet been sufficiently comprehended. The book "Capital and Growth" (1965) used the concept of comparative dynamics to study stable and optimal paths of development. In this book, X. introduced into the analysis the concept of markets with “fixed” and “flexible” prices, the distinction between which has proven productive in modern macroeconomics.

In his work “A Theory of Economic History” (1969), X. applied his theory to the analysis of economic history, thereby offering a new perspective on economic reality. He drew attention, for example, to the sequence of events through which the spread of new technology led to economic growth. This idea was developed in the book “Capital and Time” (1973). The work “Causality in Economics” (1979) examined the sequence of economic processes, the difference between economic stocks and flows, and the problem of identifying the causal relationship between changes in economic development.

In 1972, X. shared the Alfred Nobel Prize in Economics with K. Arrow "for his innovative contributions to the general theory of equilibrium and the theory of welfare." In his speech at the presentation of the laureates, a member of the Royal Swedish Academy of Sciences, R. Bentzel, emphasized that the work “Cost and Capital” “breathed new life into the theory of general equilibrium,” and X.’s equilibrium model “gave a more specific character to the equations included in the system, and made it possible to study the effects that arise within a system under the influence of impulses coming from outside."

After his retirement in 1965, X. remained until 1971 as a research fellow at All Souls College, Oxford. He responded eagerly to everything new that appeared in economic science. In the last years of his life, X. published “The Crisis in Keynesian Economics” (1974), “Economic Perspectives: Further Essays on Money and Growth”, 1977), “Wealth and Welfare” (1981), “Money, Interest, and Wages” (1982), “Classics and Moderns” , 1983), “Methods of Dynamic Economics”, 1985.

In addition to the Nobel Prize, X. was awarded many honorary scientific titles and awards. He was a member of the British Academy of Sciences, the Royal Swedish Academy of Sciences, the Italian National Academy of Sciences, the American Academy of Arts and Sciences, and honorary doctorates from several British universities (Glasgow, Manchester, Leicester, Warwick, etc.), as well as the Technical University of Lisbon. From 1960 to 1962 he was president of the Royal Economic Society, and in 1964 he was elevated to the rank of nobility.

Major works: The Theory of Wages. London, 1935; Value and Capital. Oxford, 1939; The Social Framework: An Introduction to Economics, Oxford, 1942; A Contribution to the Theory of the Trade Cycle. Oxford, 1950; A Revision of Demand Theory. Oxford, 1956; Essays in World Economics. Oxford, 1959; Critical Essays in Monetary Theory, Oxford, 1967; A Theory of Economic History. Oxford, 1969; Capita! and Time: A Neo-Austrian Theory. Oxford, 1973; The Crisis in Keynesion Economics. Oxford, 1974; The Social Framework of the Japanese Economy: An Introduction to Economics. Tokyo, 1974 (with H. Hocce); Economic Perspectives: Further Essays on Money and Growth. Oxford, 1977; Wealth and Welfare. Cambridge, Mass., 1981; Collected Essays on Economic Theory. Vol. 1. Oxford, 1981; Money, Interest, and Wages. Cambridge, Mass., 1982; Methods of Dynamic Economics. Oxford, 1985.

In Russian: Cost and capital. Per. from English M.: Progress, 1993.

About the laureate: Baumol W. J. John R. Hicks Contribution to Economics//Swedish Journal of Economics. 1972. Vol. 74. N 4. pp. 503-527; Reid G. C, Wolfe J. N. Hicks John R. // International Encyclopedia of the Social Sciences. New York, 1979. Vol. 18, pp. 300-302; Morgan B. Sir John Hicks Contribution to Economic Theory//Twelve Contemporary Economists. New York, 1981, pp. 108-140.

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