One of the foremost Cambridge economists in the post-war period, Nicholas Kaldor began his professional existence in the Walrasian-Austrian tradition at Robbins’s LSE – during which he made important contributions in the theory of equilibrium (1934), the firm (1934, 1935), capital (1939) and particularly, welfare economics, where he developed the famous ‘compensation’ criteria for welfare comparisons (1939).
After Keynes’s General Theory appeared in 1936, Kaldor abandoned his LSE roots and joined the Keynesian Revolution – and even tried to convert Arthur Cecil Pigou in the process! His seminal contributions to Keynesian theory include the concept of own rates of interest and dynamic effects of speculation (1939), the introduction of non-linear dynamics in order to create an endogenous theory of the business cycle (1940). Kaldor was also involved in an intense debate (1939, 1942) with Friedrich Hayek, which helped bury the latter’s venture into business cycle theory.
An outgrowth of this, was his construction of the ‘Cambridge’ approach to growth theory (1954, 1956, 1961, 1962) which invoked several Ricardian concepts and was to become central to Neo-Ricardian and Post Keynesian theory. He also adopted and developed Thorstein Veblen‘s concept of ‘cumulative causation’ and Verdoorn’s Law (1966, 1970, 1977, 1981) – an early formulation of endogenous growth theory that also became part of the PK arsenal. Throughout his life, Kaldor remained a staunch critic of neo-classical economics as a whole, and Monetarism in particular (1970, 1972, 1975, 1977, 1983, 1985), both in theoretical terms and in policy implications.
In the post-war era, Kaldor applied his skills to development policy. Among his policy advice to developing countries was his famous ‘Expenditure Tax’ (1955) scheme (which was implemented in India and Sri Lanka, when Kaldor worked as an advisor to both countries) and his Bancor ‘Commodity Reserve Currency’ scheme (1964, with Hart and Tinbergen), is yet to be taken up.
Although his contributions to economics have been numerous and in many fields, Kaldor may be best remembered in forging, together with Joan Robinson, the core of the Cambridge School and its offshoots – the Neo-Ricardian and Post Keynesian schools.
Major Works of Nicholas Kaldor
– The Case Against Technical Progress, 1932, Economica
– The Determinateness of Static Equilibrium, 1934, RES
– The Equilibrium of the Firm, 1934, EJ
– Market Imperfection and Excess Capacity, 1935, Economica
– Pigou on Money Wages in Relation to Unemployment, 1937, EJ
– Welfare Propositions in Economics, 1939, EJ
– Speculation and Economic Stability, 1939, RES
– Capital Intensity and the Trade Cycle, 1939, Economica
– A Model of the Trade Cycle, 1940, EJ
– Professor Hayek and the Concertina Effect, 1942, Economica
– The Relation of Economic Growth and Cyclical Fluctuations, 1954 EJ
– An Expenditure Tax, 1955
– Alternative Theories of Distribution, 1956, RES
– A Model of Economic Growth, 1957, EJ
– Monetary Policy, Economic Stability, and Growth, 1958
– Economic Growth and the Problem of Inflation, 1959, Economica
– A Rejoinder to Mr. Atsumi and Professor Tobin, 1960, RES
– Keynes’s Theory of the Own-Rates of Interest, 1960, in Kaldor, 1960
– Essays on Value and Distribution, 1960
– Essays on Economic Stability and Growth, 1960
– Capital Accumulation and Economic Growth, 1961, in Lutz, editor, Theory of Capital
– A New Model of Economic Growth, with James A. Mirrlees, 1962, RES
– The Case for a Commodity Reserve Currency, with A.G. Hart and J. Tinbergen, 1964, UNCTAD
– Essays on Economic Policy, 1964, two volumes
– Causes of the Slow Rate of Economic Growth in the UK , 1966
– The Case for Regional Policies, 1970, Scottish JE
– The New Monetarism, 1970, Lloyds Bank Review
– Conflicts in National Economic Objectives, 1970, EJ
– The Irrelevance of Equilibrium Economics, 1972, EJ
– What is Wrong with Economic Theory, 1975, QJE
– Inflation and Recession in the World Economy, 1976, EJ
– Equilibrium Theory and Growth Theory, 1977, in Boskin, editor, Economics and Human Welfare
– Capitalism and Industrial Development, 1977, Cambridge JE
– Further Essays on Economic Theory, 1978
– The Role of Increasing Returns, Technical Progress and Cumulative Causation…, 1981, Economie Appliquee
– Fallacies on Monetarism, 1981, Kredit und Kapital
– The Scourge of Monetarism, 1982
– The Role of Commodity Prices in Economic Recovery, 1983, Lloyds Bank Review
– Keynesian Economics After Fifty Years, 1983, in Trevithick and Worswick, editors, Keynes and the Modern World
– Economics Without Equilibrium, 1985
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