Archives: Terms

Keynes’s Theory of Wages and Prices Keynes’s theory of wages and prices is a central element of his broader economic theories, which are collectively known as Keynesian Economics. Formulated by John Maynard Keynes, a British economist, during the early 20th century, this theory challenges classical economics’ assumptions about how markets […]

Definition of the Keynes–Ramsey Rule The Keynes–Ramsey rule is a principle in economics that provides guidelines for the optimal rate of savings in an economy. It suggests that the rate of savings should be determined in a way that maximizes the utility of consumption over time. This rule is based […]

Definition of Keynesian Cross The Keynesian Cross represents a concept in economics that illustrates the relationship between total income and aggregate expenditure (or total spending) in the economy. This model is rooted in Keynesian economics, which emphasizes the role of aggregate demand in determining the overall level of economic activity […]

Definition of Keynesian Beauty Contest The Keynesian Beauty Contest is a concept introduced by the famous economist John Maynard Keynes to describe the workings of financial markets. Keynes likened the stock market to a fictional newspaper contest, in which participants are asked to choose from a set of photographs the […]

Definition of Keynes Effect The Keynes effect is a theoretical concept in macroeconomics that describes how an increase in prices can lead to an increase in real money supply and thus stimulate aggregate demand. This idea is rooted in the work of John Maynard Keynes, a British economist whose theories […]

Kaldor’s growth model is a significant theoretical framework in the field of economics, developed by the Hungarian-born British economist Nicholas Kaldor. This model represents an endeavor to articulate how economic growth occurs in a capitalist system and highlights the interdependence of various economic sectors, focusing on the factors that drive […]

Definition of Kaldor’s Growth Laws Kaldor’s growth laws, formulated by Nicholas Kaldor, are a set of principles that aim to explain the elements driving economic growth, especially in the context of post-war advanced economies. Although not empirical laws in the strict sense, they have been influential in the development of […]

Understanding Kaldor’s Facts Kaldor’s facts refer to a set of economic observations identified by Nicholas Kaldor in the mid-20th century, which have stood the test of time and remain remarkably consistent across different countries and economic epochs. These facts serve as a foundation for macroeconomic theories and models by providing […]

Definition of Kaldor-Hicks Efficiency Kaldor-Hicks efficiency, often associated with the concept of potential Pareto improvements, is a criterion used in economics to assess economic or policy changes. According to this criterion, an action resulting in efficiency improvement can be considered beneficial if those who gain from it could in theory […]

Definition of Just Price Just Price is a concept stemming from medieval theological and philosophical thought, particularly within the Scholastic tradition. It refers to the ethical and moral price of a good or service that is considered fair for both the buyer and the seller, taking into account the cost […]