Gerard Debreu

It is difficult to underestimate the luminous shadow cast by Gerard Debreu over Neo-Walrasian general equilibrium theory. For many years, Gerard Debreu has set the standard as well as posed most of the questions (and, in many cases, provided many of the solutions) that were to be addressed by mathematical economics – an achievement paralleled only

1 Comments

Gibrat’s rule of proportionate growth (1931)

Named after French economist ROBERT GIBRAT (1904-1980) (and sometimes called Gibrat’s Law), Gibrat’s rule of proportionate growth states that the proportional change in the size of a company in an industry is the same for all such companies irrespective of their original size. If a company with sales of $10m doubles in size over

2 Comments

Giffen paradox (C.1895)

Proposed by Scottish economist Sir Robert Giffen (1837-1910) from his observations of the purchasing habits of the Victorian poor, Giffen paradox states that demand for a commodity increases as its price rises. Giffen paradox is explained by the fact that if the poor rely heavily on basic commodities like bread or potatoes, when prices are low

2 Comments

Golden rule of capital accumulation (1961)

A term used by English economist ERNEST PHELPS (1906-1994), golden rule of capital accumulation analyzes the best plan of economic growth which will give the optimal sustained level of consumption per capita in an economy. It is assumed that each generation will save for future generations a proportion of the income which was in

2 Comments

Gravity model (1947)

Developed by American astronomer James Stewart, gravity model is an examination of the interaction between two places relating to size, distance and importance. The relationship between the two places is seen as corresponding directly to product, and inversely to distance. The gravity model is used in regional economics and transport studies. However, it is

1 Comments

Gresham’s law (19TH CENTURY)

Usually attributed to English businessman Sir Thomas Gresham (1519-1579), Gresham’s Law is often summarized as ‘Bad money drives out good.’ Gresham’s observation concerned the likelihood that coins with bullion content equal or higher than their face value would be removed from circulation and melted down, leaving in circulation only coins with a metal value

3 Comments

Group theory (19TH CENTURY)

Developed by Norwegian mathematician Marius Spohus Lie (1842-1899) and later adopted by modern economists, group theory is a method of analyzing invariant relationships among economic variables where often the relationships are represented by differential equation systems. Source: R Sato, Theory of Technical Change and Economic Invariance: Application of Lie Groups (New York, 1981) Main

1 Comments

Growth of the firm (1959)

Posited by British economist EDITH PENROSE (1914-1996) and forming part of managerial theories of the firm, theory of the growth of the firm relates to economic expansion due to processes taking place within the firm. Managers are presumed to reach their optimal rates of power and prestige by following a path towards product excellence and

2 Comments

Growth pole theory

Rooted in the work of English economist and academic Sir William Petty (1623-1687), and associated with French economist François Perroux (1903-1987), growth pole theory refers to the grouping of industries around a central core of other industries whose actions act as a catalyst to growth in the area. Although growth pole theory does not include geographical concentration of

4 Comments

Karl Gustav Cassel

Gustav Cassel has the unfortunate distinction of belonging to that distinct group of influential economists who are intensely disliked by everyone. The Stockholm School, where he taught for many years, did its utmost to dissociate itself from him due to Cassel’s bitter rivalry with their beloved master, Knut Wicksell. Although Walrasians applauded his general equilibrium

1 Comments

Hans Walter Singer (1910- )

The German-born Hans Singer was trained by Joseph Schumpeter and Arthur Spiethoff at Bonn, before gravitating to Cambridge, where he trained under John Maynard Keynes. It was under Keynes, that he produced his early surveys on unemployment (1937, 1940). In 1947, Singer moved onto the United Nations, with which he would be associated for much of his

5 Comments

Harold Hotelling

Harold Hotelling’s articles on econoimcs were few, but his contributions were profound enough to make him one of the ‘leaders’ of the Paretian School, the ‘resurrectors’ the Marginalist Revolution in the 1930s. Hotelling’s 1929 paper on the stability of competition introduced the notion of spatial competition in a duopoly situation. The solution to this

1 Comments

Harrod-Domar growth model (20TH CENTURY)

Named after English economist Roy Harrod (1900-1978) and Polish-born American economist Evsey Domar (1914-1997), Harrod-Domar growth model postulates three kinds of growth: (1) warranted growth (the rate of output at which firms feel they have the right level of capital and do not wish to expand or decrease investment); (2) natural rate of growth (corresponding to growth in

1 Comments

Heckscher-Ohlin trade theory (1919)

First developed by Eli Heckscher (1879-1952) and later developed by fellow Swedish economist Bertil Ohlin (1899-1979) in 1933, Heckscher-Ohlin trade theory is a theory to explain the existence and pattern of international trade based on a comparative cost advantage between countries producing different goods. Heckscher and Ohlin state that this advantage exists because of the relative resource endowments of the countries

2 Comments

Herbert A. Simon

There are many that claim that Herbert A. Simon has precipitated something like a revolution in microeconomics. This revolution is in the concept of ‘decision-making’ in organization and under uncertainty, which he claims is far away from the ‘rational man’ often assumed in mainstream microeconomics. He is certainly not the first one to come

1 Comments

Hilaire Belloc

Hilaire Belloc, the son of Louis Belloc, a French barrister, was born in St. Cloud near Paris in 1870. His mother was Elizabeth Rayner Parkes, the daughter of the Birmingham radical, Joseph Parkes, and granddaughter of Joseph Priestley. Although she was converted to Catholicism from Unitarianism, she remained a political radical and was a

7 Comments

Hollis B. Chenery

Student of Wassily Leontief. Received his Ph.D. from Harvard in 1950. Major Works of Hollis B. Chenery – Overcapacity and the Acceleration Principle, 1952, Econometrica – Interindustry Economics, with P. Clark, 1959. – Patterns of Industrial Growth, 1960, AER – Comparative Advantage and Development Policy, 1961, AER – Capital-Labor Substitution and Economic Efficiency, with K.J.

4 Comments

Hotelling’s Law (1929)

Formulated by American economist Harold Hotelling (1895-1973) from his observations on the stability of competition, Hotelling’s Law states that competitors differentiate their goods and services as little as possible in order to maximize demand from the public. The law explains why retailers (department stores, newsagents and restaurants) tend to cluster together, and why airlines adopt similar

2 Comments

Hypercompetition theory

The hypercompetition theory analyzes the rapid and dynamic competition characterized by unsustainable advantage. It is the condition of rapid escalation of competition based on price-quality positioning, competition to protect or invade established product or geographic markets and competition based on deep pockets (financial capital) and the creation of even deeper pocketed alliances. Often a

Hugo Grotius

Hugo Grotius (Huigh De Groot) was a Dutch legal scholar, playwright and poet. As a natural law philosopher, he is generally credited as the originator of ‘natural morality’ and the social contract theory of the state. His 1609 book promoted idea that seas should be free for the innocent use and mutual benefit of all – an

2 Comments