# Nicholas Kaldor

Nicholas Kaldor

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

## Life

Kaldor was the son of a lawyer. After successfully attending a grammar school in Budapest, Kaldor went to Berlin to study there. In 1927 he moved to the London School of Economics and Political Science . He was later a professor at the University of Cambridge . He was accepted into the British Academy in 1963 , the American Academy of Arts and Sciences in 1977, and the Hungarian Academy of Sciences in 1979. He also received honorary doctorates from the University of Dijon (1962) and the Goethe University Frankfurt am Main (1982).

Nicholas Kaldor died in Cambridge in 1986 at the age of 78 .

## plant

### The consumption function

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

            Gesamtwirtschaftliches Einkommen Y:${\displaystyle Y=L+P}$


where L is wages and P is profits ( profits ).

            Konsum C: ${\displaystyle C=c_{l}\cdot L+c_{p}\cdot P}$
wobei ${\displaystyle c_{l}>c_{p},}$



${\ displaystyle c_ {l}}$and are the constant propensity to consume of wage and profit earners. ${\ displaystyle c_ {p}}$

### Harrod Domar model

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

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

### The technical progress function

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

### Kaldor-Hicks criterion

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

## 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

## literature

• Allen, RGD: Macro-Economic Theory  : A Mathematical Treatment. - London, Melbourne, Toronto: Macmillan, 1968.
• Peuker, Axel: The Theories of Nicholas Lord Kaldor  : A Contribution to the Post- Keynesian Paradigm. - Marburg: Metropolis-Verl., 1997. - ISBN 3-89518-039-4
• Targetti, Ferdinando: Nicholas Kaldor  : the economics and politics of capitalism as a dynamic system. - Oxford: Clarendon, 1992. - ISBN 0-19-828348-2

## Individual evidence

1. Nicholas Kaldor 1908–1986 . In: Proceedings of the British Academy . 73, 1987, pp. 517-566.