John R. Hicks was Drummond Professor of Political Economy at Balliol College, Oxford until his retirement in 1965. He and Kenneth J. Arrow received the Nobel Prize in Economics in 1972. Hick's was awarded the prize "for his theories of welfare and resource allocation and his macroeconomic studies of general equilibrium. He was knighted in 1965.
Hicks is most widely known for his development of the LM (liquidity-money) curve , which is a graphical representation of the money market of Keyne's general theory. He also introduced the concept of the elasticity of substitution and "Hick's compensati on test". The Hick's compensation test has been used by policy makers in determining whether the benefit of a policy to some outweighs the hurt of the policy to others. If those who benefit from a policy would still be better off after they fully comp ensated those hurt by the policy, then the policy passes the compensation test. In his most famous work, "Value and Capital", he showed that the assumption of a known utility value is not necessary to prove long held convictions regarding valu e theory.
Works by John R. Hicks:
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