John Hicks

John Hicks (1904–1989) was a British economist whose work on value, capital, and general equilibrium reshaped modern economic theory. He received the 1972 Nobel Memorial Prize in Economic Sciences.

General equilibrium theory: A framework analyzing how supply, demand, and prices interact across multiple markets. Hicks extended equilibrium analysis beyond isolated markets to linked economic systems.
Value and Capital: Hicks’s 1939 book developing modern consumer theory, capital analysis, and general equilibrium economics. It gathers his core analytical methods into a systematic account of economic value.
John Maynard Keynes: A British economist whose theories of aggregate demand and employment transformed twentieth-century macroeconomics. Hicks translated key arguments of Keynes’s General Theory into the IS–LM framework.
Neoclassical synthesis: A postwar economic framework combining Keynesian short-run analysis with neoclassical long-run theory. Hicks’s IS–LM model helped make Keynesian economics compatible with standard equilibrium analysis.
Indifference curve: A curve connecting combinations of goods that provide a consumer with equal satisfaction. Hicks used indifference curves to clarify consumer choice without requiring measurable utility.
Hicksian demand: Consumer demand holding utility constant as prices change, isolating substitution effects. Hicks formalized this compensated demand to separate substitution from income effects.
Roy Harrod: A British economist known for work on economic growth, business cycles, and Keynesian theory. Harrod’s interpretation of Keynes helped prompt Hicks’s 1937 formalization of the theory.
Hicks–Hansen model: The IS–LM framework as developed and popularized by John Hicks and Alvin Hansen. Hansen’s exposition helped turn Hicks’s diagrammatic model into a standard teaching tool.
Marginal rate of substitution: The rate at which a consumer will exchange one good for another while holding satisfaction constant. This trade-off gives Hicks’s analysis of consumer choice its central geometric measure.
Slutsky equation: An equation decomposing a price change’s effect on demand into substitution and income effects. Hicks’s consumer theory developed a closely related decomposition of price responses.

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