Markets, Money and Capital

467 Pages·2009·2.75 MB·English

by  Roberto Scazzieri

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Markets, Money and Capital
SirJohnHicks(1904–89)wasaleadingeconomictheoristofthetwen-
tieth century, and along with Kenneth Arrow was awarded the Nobel
Prize in 1972. His work addressed central topics in economic theory,
suchasvalue,money,capital,andgrowth.Animportantunifyingtheme
wastheattentiontoeconomicrationality‘intime’andhisacknowledg-
mentthatapparentrigiditiesandfrictionsmightexertapositiveroleasa
bufferagainstexcessivefluctuationsinoutput,prices,andemployment.
This emphasis on the virtue of imperfection significantly distances
Hicksian economics from both the Keynesian and monetarist
approaches. Containing contributions from distinguished theorists in
their own right (including three Nobel Prize-winners), this volume
examinesHicks’sintellectualheritageanddiscusseshowhisideassug-
gestadistinctapproachtoeconomictheoryandpolicy-making.Itwillbe
of great interest to scholars and students of economic theory and the
historyofeconomicthought.
roberto scazzieri is Professor of Economics at the University of
Bologna, a Senior Member of Gonville and Caius College and Life
MemberofClareHall,Cambridge.
amartya sen is a Nobel laureate and Professor of Economics and
PhilosophyatHarvardUniversity.
stefano zamagni is Professor of Economics at the University of
Bologna and Adjunct Professor of International Economics at Johns
HopkinsUniversity.

Markets, Money and Capital
Hicksian Economics for the Twenty-first Century
editedby
Roberto Scazzieri,
Amartya Sen
and
Stefano Zamagni
CAMBRIDGE UNIVERSITY PRESS
Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo
Cambridge University Press
The Edinburgh Building, Cambridge CB2 8RU, UK
Published in the United States of America by Cambridge University Press, New York
www.cambridge.org
Information on this title: www.cambridge.org/9780521873215
© Cambridge University Press 2008
This publication is in copyright. Subject to statutory exception and to the
provision of relevant collective licensing agreements, no reproduction of any part
may take place without the written permission of Cambridge University Press.
First published in print format 2009
ISBN-13 978-0-511-48091-1 eBook (NetLibrary)
ISBN-13 978-0-521-87321-5 hardback
Cambridge University Press has no responsibility for the persistence or accuracy
of urls for external or third-party internet websites referred to in this publication,
and does not guarantee that any content on such websites is, or will remain,
accurate or appropriate.
Contents
List of fig ures page viii
Listoftables x
Listofcontributors xi
Prefaceandacknowledgments xiii
Betweentheoryandhistory:ontheidentityofHicks’s
economics
roberto scazzieri and stefano zamagni 1
PartI TheIntellectualHeritageofJohnHicks
1 Hicksonliberty
amartya sen 41
2 Aneconomistevengreaterthanhishighreputation
paul a. samuelson 49
3 Hicks’s‘conversion’–fromJ.R.toJohn
luigi l. pasinetti and gianpaolo mariutti 52
4 DearJohn,DearUrsula(CambridgeandLSE,1935):
eighty-eightlettersunearthed
maria cristina marcuzzo and eleonora
sanfilippo 72
5 Hicksandhispublishers
andrew l. schuller 92
6 Hicksinreviews,1932–89:fromTheTheoryofWagesto
AMarketTheoryofMoney
warren young 109
v
vi Contents
PartII Markets
7 Hicksandtheemptinessofgeneralequilibriumtheory
christopher bliss 129
8 HicksversusMarx?Onthetheoryofeconomichistory
pierluigi ciocca 146
9 Hicks’snotionanduseoftheconceptsoffix-priceandflex-
price
marcello de cecco 157
10 OntheHicksiandefinitionofincomeinappliedeconomic
analysis
paolo onofri and anna stagni 164
PartIII Money
11 Historicalstylizationsandmonetarytheory
alberto quadrio curzio and roberto scazzieri 185
12 Hicks:money,prices,andcreditmanagement
omar f. hamouda 204
13 Core,mantle,andindustry:amonetaryperspective
ofbanks’capitalstandards
rainer masera 225
14 Asuggestionforsimplifyingthetheoryofassetprices
riccardo cesari and carlo d’ADDA 252
PartIV CapitalandDynamics
15 ‘DistributionandEconomicProgress’afterseventyyears
robert m. solow 277
16 Flexiblesavingandeconomicgrowth
mauro baranzini 287
17 Theeconomicsofnon-linearcycles
piero ferri 309
18 AperspectiveonaHicksiannon-lineartheory
ofthetradecycle
kumaraswamy vela velupillai 328
Contents vii
19 Capital,growth,andproductiondisequilibria:onthe
employmentconsequencesofnewtechnologies
harald hagemann 346
20 Capitalandtime
erich w. streissler 367
21 Sequentialanalysisandout-of-equilibriumpaths
mario amendola and jean-luc gaffard 382
References 405
Nameindex 433
Subjectindex 441
Figures
10.1 Ratio of expect ed to actual inflati on, 1970 –200 5 page 167
10.2 Househol d disposa ble inco me with and without Hicksia n
correction(percentagechange),1971–2004 167
10.3 Rateofprofitandrealrateofreturnonfinancialassets
associatedwithindustrialfixedcapital,1951–2003 171
10.4 Rateofprofitandrealcostofcapital,1951–2003 173
10.5 Realrateofreturnonfinancialassetsandrealcostofcapital,
1952–2003 174
10.A1 Householdconsumption:errorcorrectionrepresentation(a),
1971–2003 177
10.A2 Householdconsumption:errorcorrectionrepresentation(b),
normalizedresiduals,1971–2003 178
10.A3 Householdconsumption:errorcorrectionrepresentation
withdisposableincomepartiallyadjustedàlaHicks(a),
1971–2003 179
10.A4 Householdconsumption:errorcorrectionrepresentation
withdisposableincomepartiallyadjustedàlaHicks(b),
normalizedresiduals,1971–2003 180
12.1 Hicks’smodelinCapitalandGrowth:traverseI 213
13.1 EquityasapercentageofassetsforUScommercialbanks,
1840–1993 233
13.2 Aggregatesupplywithexogenouswagerates 234
13.3 Creditandmarketrisk:frequencydistributions 239
13.4 Portfoliocreditlosses 244
13.5 Capital/assetratiosofbankingsystemintheUnitedStates,
theUnitedKingdom,andSwitzerland,1830–2000 245
17.1 Theendogenousfluctuationsoftheeconomy 318
17.2 Endogenouscycleswithboundedrationality 321
18.1 MultipleequilibriainAContributiontotheTheory
oftheTradeCycle 332
18.2 TheGoodwincharacteristic 339
18.3 StablelimitcyclefortheGoodwincharacteristic 339
viii