Name: David Felipe Bautista Bernal

Hicks approaches on Keynes in "Keynes and the classics: a suggested interpretation"

Hicks. J. R (1937) “Keynes and the classics: a suggested interpretation”

The article "Keynes and the classics: a suggested interpretation" published by the English

economist John Richard Hicks in 1937, allows the reader to contrast two perceptions about

the general development of classical theory, because the main objective of Hicks in the article

is to raise and demonstrate their own model of theory, thus exposing the first main point of

view within the text, the above is justified and based primarily on the author's criticism of the

second point of view that can be analyzed within that work, which it is the development of

the general employment theory of John Maynard Keynes, another English economist; model

which according to Hicks based on a vision a little remote from the reality of the original

classics. Then the main criticism of Hicks to Keynes would be the above already described.

Hicks mainly supports his hypothesis that the development of the general theory of

employment by economist Keynes may be wrong because it is far from the original classical

ideas because it was based primarily on the thinking of the English economist and professor

Arthur Pigou, embodied in his respective work "The theory of unemployment", which from

the perspective of Hicks, was far from the ideas of the classics.

Within the article Hicks establishes several premises from the beginning, which would be the

basis of his `` classic '' model, in addition, these serve to compare that model with that of

Keynes. Among the premises that Hicks would raise are aspects such as: it is assumed that it

is a short period of time in which the quantities of equipment of all types are constant, a

homogeneous work is assumed, likewise that all present depreciation can be ignored.
Similarly, Hicks begins the development of its model by establishing a symbology to specific

variables such as: it defines “x” and “y” as products of investment goods and consumer

goods, in addition to “Nx” and “Ny ”Are respectively the number of men employed in the

production of said goods. On the other hand "W" would represent a salary rate per person and

"M" a budget. Bases from which analysis that are essential today in the study of

microeconomics would emerge.

Within the exposed by Hicks in the article certain properties of his model can be understood,

among the most relevant can be found: it would be understood that the total income depended

on the amount of money, as well as that the total employment would not be determined by a

income, but it would depend on the amount saved from this income, also that an increase in

the incentive to invest would cause an increase in the rates and interests affecting the savings.

Similarly, it can be understood as properties derived from the Hicks model that first The

increase in the supply of money necessarily generates an increase in income, which would

generate an increase in employment.

With the article worked on this review and others, Hicks was able to develop different

theories and models that allow us to better understand his interpretation of Keynes and his

theories, as well as that of the classics. Likewise, the importance of these articles lies in the

fact that they allow to illustrate a process of deformation on the theory that little by little

becomes the one worked in the courses of Microeconomics at international level

References

Hicks. J. R (1937) “Keynes and the classics: a suggested interpretation”