Richard Kahn (1905-1989)

A sparse writer, Richard F. Kahn reknown nonetheless rests on a fundamental idea he formulated at the age of 25 and published in 1931 – which was duly pinched by his master, John Maynard Keynes, and made the centerpiece of the latter’s General Theory (1936): the concept of the multiplier. Richard Kahn, nonetheless, bore his mentor no grudge

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Robert J. Barro

However much theoretical and empirical work Robert J. Barro has done, it is nothing compared with the amount of work he has forced others to undertake in an effort to address his insights. The career of this renowned Harvard New Classical macroeconomist has evolved through several distinct stages. Nonetheless, at each stage, Barro has

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Sir Robert Giffen (1837-1910)

Journalist and statistician who wrote on economic and financial subjects mainly, notably on indicators such as wage rates, economic growth, and national product. Fierce supporter of laissez-faire, pro-free trade and anti-bimetallism. Credited by Alfred Marshall for suggesting the possibility that, in the case of some inferior goods, the income effects are so strong that the law of

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Robert E. Lucas, Jr.

One of the most influential modern economic theorists, Robert Lucas is the leader of the New Classical school – the ‘modern’ version of the Chicago School. His introduction of the concept of rational expectations in the 1970s helped to decisively bury the Neo-Keynesian orthodoxy and inaugurated a new era of macroeconomics relying on the neo-classical concept

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Robert A. Mundell

Robert Mundell is a Canadian economist who graduated from the University of British Columbia in Vancouver. He attended MIT and was top performer in his years there. He went on to win the 1999 Nobel prize in Economics. He is affiliated with Columbia University’s Economics department. Major Works of Robert A. Mundell – International

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Robert M. Solow

Robert Solow is one of the major figures of the Neo-Keynesian Synthesis macroeconomics. Together with Paul Samuelson, he formed the core of the M.I.T. economics department which has been widely viewed as the ‘mainstream’ of the post-war period. Together, Robert Solow and Paul Samuelson have contributed to various landmark pieces of work: e.g. on von

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Colonel Robert Torrens

British army officer and owner of the influential Globe newspaper. Torrens led the Anti-Bullionists during the Bullionist Debate of the 1810s but later did a virtual 180° turn to join the side of the Currency School in the Banking-Currency School Debate of the 1840s. Robert Torrens was an independent discoverer of the Ricardo’s principle of

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Ronald H. Coase

This LSE-trained member of the Chicago School is best known for two particular contributions to economic theory. In Coase’s work on the nature of the firm (1937), he argued that firms should be conceived as entities endogenous to the economic system and whose existence is justified only in the presence of transactions costs to

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Ronald Wilson Reagan

On February 6, 1911, Ronald Wilson Reagan was born to Nelle and John Reagan in Tampico, Illinois. He attended high school in nearby Dixon and then worked his way through Eureka College. There, he studied economics and sociology, played on the football team, and acted in school plays. Upon graduation, he became a radio

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Roundabout method of production (1889)

Advanced by Austrian economist EUGEN VON BOHM-BAWERK (1851-1914), roundabout method of production describes the use of capital goods to increase future productivity of the factors of production. Production efficiency often entails diverting labour and capital away from the immediate method of production in order to achieve a better method. A house painter may paint

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Sir Roy F. Harrod

Roy Harrod taught economics, and produced his original contributions to the subject, at Oxford between 1924 and his retirement in 1967. Elected to a Lectureship at Christ Church Oxford in 1922, he then spent a few months at Cambridge with John Maynard Keynes, with whom he remained in close touch for the rest of Keynes’

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Rybczynski theorem (1955)

Named after Polish-born English economist TADEUSZ RYBCZYNSKI (1923-1998), Rybczynski theorem posits that when one of two factors of production is increased there is a relative increase in the production of the good using more of that factor. This unfortunately leads to a corresponding decline in that good’s relative price. Also see: Heckscher-Ohlin trade theory Source:

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Satisficing

Satisficing is the pursuit by a firm of satisfactory profits instead of maximum profit because the company has as its goal some other objective such as maximum market share, sales or management satisfaction. The concept of ‘satisfactory’ profits is subjective and varies from firm to firm. Also see: theory of the firm, theory of the growth

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Say’s law (1803)

Also known as Say’s law of markets. Named after Jean-Baptiste Say (1767-1832), Say’s law argued that an economy is self-regulating provided that all prices, including wages, are flexible enough to maintain it in equilibrium. In a more simplistic, and somewhat inaccurate form, Say’s law states that supply creates its own demand and over-production is impossible. This theory

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Scitovsky paradox

Named after the Hungarian-born American economist TIBOR SCITOVSKY (1910-2002), Scitovsky paradox states that in welfare economics there is no increase in social welfare by a return to the original part of the losers. If Allocation X is changed to Allocation Y, those who suffer in the move could still gain enough by returning to

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Screening hypothesis

Screening hypothesis maintains that education is a filter, or screen, by which innate talent is identified. The purpose of education is seen as confirmation of an individual’s capability to be trained on the job rather than the conferring of skills to a worker. It is used as an alternative to human capital theory. Also

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Search theory (1962)

Search theory is the analysis of how buyers and sellers acquire information about market conditions and how potential market participants are brought together. Its application to labor markets was pioneered by the American economist GEORGE STIGLER (1911-1991). Search theory recognizes the principle that both employers and workers need to invest time and other resources

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Secular stagnation theory (20TH CENTURY)

Analysis of a protracted economic depression characterized by a falling population growth, low aggregate demand and a tendency to save rather than invest. The bulk of modern economic endeavour has been to avoid this depression or to curb the impact of it on people. Some recent theorists have suggested that stagnation is a desirable

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Segmented labor market theory (1970S)

The labor market consists of various sub-groups which have little crossover capability. Wage determination differs from group to group. A common example is dual labor market theory. Also see: crowding hypothesis Source: F Wilkinson, ed., The Dynamics of Labor Market Segmentation (New York, 1981) Neoclassical economics The theory of labor market segmentation contrasts with neo-classical economic theory,

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Shadow pricing (1970S)

Use of linear programming techniques in situations in which a price cannot be charged or where the price does not reflect the effort made in producing the good. In general this policy attempts to achieve an optimum allocation of resources in the absence of an effective price system. Also see: cost-benefit analysis, opportunity cost Source: I

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