Nicholas Kaldor

Nicholas Kaldor, Baron Kaldor ( Káldor Miklós; born March 12, 1908 in Budapest, † 30 September 1986 Papworth Everard, Cambridgeshire ) was a Hungarian economist. He was known as Keynesian.

Life

Kaldor was the son of a lawyer. After his successful visit to a high school in Budapest Kaldor went to Berlin to study there. In 1927 he moved to the London School of Economics and Political Science.

At the age of 78 years Nicholas Kaldor died in Cambridge in 1986.

Work

The consumption function

Kaldor assumed that the workers would consume a higher proportion of their income than the recipients of profit income or profit. The consumption depends not just as in simpler Keynesian models of the income Y total, but also by the distribution of income in wage income and profit income L P ( engl. "profit ").

Macroeconomic income Y: where L is the wages and P are the profits (profits ).

Consumption c:              in which                and are the constant propensities to consume of wage and profit earners.

Harrod - Domar model

In this growth model, the economy is growing at the desired rate satisfactory or if the overall savings ratio s is equal to the growth rate g multiplied by the technically given at Domar capital coefficient v = K / Y. The capital-output ratio v specifies which capital stock K is technically required to achieve a certain production Y.

It would of course be a coincidence if s just had this value. The consumption function of Kaldor now allows at least in theory, a solution to this problem ( although other theories suggest other solutions ), since wages and profits aggregate consumption ratio c, which complements the macroeconomic savings rate s 1, can be varied by changing the distribution of income. If the savings rate is too low, the share of profits must be increased in total income, it is too high, the proportion must be reduced.

The technical progress function

Another contribution to Kaldor's growth theory is the function of technical progress, the technical progress function. It represents a relationship forth between the rate of increase of labor productivity as a function of the rate of increase in capital intensity. The capital intensity is the stock of capital (factories, buildings, etc.) in relation to the number of employees.

Kaldor -Hicks criterion

Together with John Richard Hicks, he published in 1939 the Kaldor -Hicks criterion by which the efficiency of compensation payments for welfare comparisons is described.

Works (selection)

• The essential Kaldor. - London:. Duckworth, 1989 - ISBN 0-7156-2282- X
• Paths to Prosperity: Economic Issues and reconstruction plans. - Cologne: Staufen -Verl, 1948.