JOHN HICKS Meaning and
Definition
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John Hicks was an eminent British economist who made significant contributions to economic theory and was one of the key figures in the development of microeconomics. Born in 1904 and passed away in 1989, Hicks was widely respected for his groundbreaking work on welfare economics and general equilibrium theory.
Hicks is most renowned for his development of the concept of the "compensating variation." This economic tool measures the change in income that would make an individual indifferent between their current state and a hypothetical situation. It provides insights into the value of different policy interventions in terms of economic welfare.
Additionally, Hicks played a crucial role in the synthesis of neoclassical and Keynesian economics in what is known as the IS-LM model. This model illustrates the relationship between real income and interest rates, offering insights into the determination of output and equilibrium in the economy.
Hicks also made important contributions to the field of industrial organization, particularly through his work on the theory of monopolistic competition. His analysis greatly influenced the understanding of market structures and pricing behavior in imperfectly competitive markets.
Overall, John Hicks was a pioneering economist whose research and writings significantly enriched the field of economics. His innovative ideas continue to be influential in various branches of economic theory, and he remains a highly respected figure in the discipline.
