John Hicks

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For other people named John Hicks, see John Hicks (disambiguation).

Sir John Hicks
welfare theory, induced innovation
AwardsNobel Memorial Prize in Economic Sciences (1972)
Information at IDEAS / RePEc

Sir John Richard Hicks (8 April 1904 – 20 May 1989) was a British

compensated demand function
is named the Hicksian demand function in memory of him.

In 1972 he received the Nobel Memorial Prize in Economic Sciences (jointly) for his pioneering contributions to general equilibrium theory and welfare theory.[1]

Early life

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

Philosophy, Politics and Economics, the "new school" that was just being started at Oxford. He graduated with second-class honours and, as he stated, "no adequate qualification in any of the subjects" that he had studied.[4]

Career

From 1926 to 1935, Hicks lectured at the

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 & 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

All Souls College
(1965–1971), where he continued writing after his retirement.

Later life

Hicks was knighted in 1964 and became an honorary fellow of

Cotswold village of Blockley.[6]

Contributions to economic analysis

Part of a series on
Macroeconomics
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Heterodox

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See also

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

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

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

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]

See also

Selected publications

References

  1. ^ The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1972. Nobelprize.org. Retrieved on 28 July 2013.
  2. ISBN 9780734044761
    .
  3. ^ "Clifton College Register" Muirhead, J.A.O. p357: Bristol; J.W Arrowsmith for Old Cliftonian Society; April, 1948
  4. ^ John R. Hicks – Biographical. Nobelprize.org (20 May 1989). Retrieved on 2013-07-28.
  5. ^ a b "Sir John Hicks". London School of Economics. 13 March 2009. Archived from the original on 14 June 2012. Retrieved 8 July 2012.
  6. ^ john hicks – British Academy Retrieved 15 January 2018.
  7. JSTOR 1907242
    .
  8. JSTOR 4537583
    .
  9. hdl:10419/109821
    .
  10. ^
    hdl:10419/109821
    .

Further reading

External links

Wikimedia Commons has media related to John Hicks.
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Awards
Preceded by
Kenneth J. Arrow
 		Succeeded by
Professional and academic associations
Preceded by President of the Manchester Statistical Society
1944–46 		Succeeded by
Sir Kenneth Lee, Bt
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