Micro Economics

Theories of Consumer Behavior

1 Marginal Utility Analysis Marshall 1890
2 Indifference Curve Theory Hicks and Allen[The indifference curve analysis 1881/1934
was developed by the British economist Francis
Ysidro Edgeworth, Italian economist Vilfredo
Pareto and others in the first part of the 20th
century.J.R.Hicks & R.G.D. Allen in their
research paper,’ A Reconsideration of the
Theory of Value’ criticized Marshallian
cardinal approach]
3 Revealed Preference Theory Samuelson 1938
4 Neumann – Morgenstern Approach Neumann & Morgenstern 1944
5 Friedman – Savage Hypothesis Friedman and Savage 1948
Market
6 Cournot Duopoly Model Cournot 1838
7 Edgeworth Oligopoly Model Edgeworth 1881
8 Bertrand’s Duopoly Model Bertrand 1883
9 Imperfect Competition Joan Robinson 1933
10 Monopolistic Competition Chamberlin 1933
11 Stackelberg’s Duopoly Model Heinrich Von Stackelberg 1934
12 Kinked Demand Curve Paul M Sweezy,R L Hall & C J Hitch 1939
13 Game Theory Neumann and Morgenstern 1944
14 Average Cost or Full Cost Pricing · Hall & Hitch 1939
· P W S Andrews 1954
· R Barback 1954

15 Sales Revenue Maximization Baumol 1959

16 Managerial Theory
17 Limit Pricing · Bain’s 1956
· Sylos – Labini 1962

· Modigliani 1958

Welfare Criterion
18 Vilfredo Pareto Pareto
19 Social Welfare Function Bergson, Samuelson 1938
20 Impossibility Theorem Arrow 1951
21 Theory of Second Best Richard Lipsey and Kelvin Lancaster 1956
22 Coase Theorem Ronald Coase 1959
23 Asymmetric Information George Akerlof, Michael Spence, and Joseph E. 2001
Stiglitz
Rent
24 Ricardian Theory of Rent Ricardo 1810
25 Modern Theory of Rent Joan Robinson 1933
26 Quasi- Rent Marshall
Profit
27 Dynamic Theory of Profit J.B.Clark 1900
28 Rent Theory of Profit F.A. Walker
29 Risk Theory of Profit H.B. Hawley 1893
30 Uncertainty Bearing Theory Frank H. Knight 1921
31 Wage Theory of Profit Taussig
32 Innovation Theory of Profit Joseph A Schumpeter 1934
Wages
33 The Marginal Productivity Theory of Wage J. B. Clark, Marshall, Walras, Wicksteed, Von
(oldest) Thunen, Jevons & Hicks.
34 The Subsistence Theory of Wage David Ricardo 18th &
(Iron Law of Wage) early
19th century
35 The Standard of Living Theory Dr. Marshall
36 The Wage Fund Theory J.S. Mill 1869
37 The Residual Claimant Theory Walker 1875
38 The Market Theory of Wages
39 The Bargaining Theory of Wage John Davidson 1898
Interest
40 The Abstinence or Waiting Theory of Interest N.W. Senior 1836
41 The Agio Theory or The Austrian or Time Bohm-Bawerk 1884
Preference Theory(Irving Fisher) (first advanced by John Rao in 1834)
42 The Marginal Productivity Theory
43 The Saving and Investment Theory (Classical J.S. Mill, Walras, Marshall & Pigou
Theory of Interest)
44 Loanable Funds Theory (Neo- Classical Theory of Knut Wicksell, (elaborated by Ohlin, Robertson 19th century
Interest) and Pigou, Myrdal)
45 The Liquidity Preference Theory Keynes 1936
(Keynesian Theory of Interest)

46 Neo-Keynesian Theory of Interest (Modern Hicks & Hansen 1937

Theory of Interest/ Hicks-Hansen Theory/IS-LM
Model)
MACRO ECONOMICS
Consumption Function
47 Absolute Income Hypothesis Keynes 1936
48 Relative Income Hypothesis Duesenberry 1949
49 Life Cycle Hypothesis (Wealth Theory of Ando, Modigliani[Modigliani formulated LCH 1954/1963
Consumption) with Richard Brumberg following a conference
on saving at University of Minnesota in 1954 but
Richard died due to a brain tumor shortly after
their famous paper thus Modigliani was forced to
prepare the hypothesis and test it in 1963.
50 Permanent Income Hypothesis Friedman 1957
Effect
51 Keynes Effect Keynes 1936
52 Pigou Effect A. C. Pigou 1943
53 Real Balance Effect Patinkin 1956
Multiplier and Acceleration
54 Accelerator J.M. Clark 1917
55 Employment Multiplier R.F. Khan 1931
56 Investment Multiplier J.M. Keynes 1936
57 Super Multiplier Hicks 1951
58 Foreign Trade Multiplier Mr. Leighton
Demand for Money
59 Classical Theory Classical 1911
60 Keynesian Theory Keynes 1936
61 Inventory Approach Baumol 1950
62 Restatement of Quantity Theory Friedman 1956
63 Port-folio Approach Tobin 1969
64 Cash Transaction Approach Fisher 1911
65 Cash Balance Approach Cambridge economists
• A.C.Pigou 1917
• Alfred Marshall 1923
• D.H. Robertson 1922

• John Maynard Keynes 1923

• R.G. Hawtrey and Frederick Lavington 1921,1922

66 Reformulated Quantity Theory of Money Keynes 1930s

67 Real Balance Effect Don Patinkin 1956
Business Cycle
68 Sun Spot or Climatic Theory William Stanley Jevons 1879
Moore (extended)
69 Psychological Theory Pigou & Beveridge 1909
70 Hawtrey’s Theory or Monetary theory Hawtrey 1926
71 Innovation Theory of Trade Cycle Schumpeter 1927
72 Von Hayek’s Theory or Over- Investment Theory Von Hayek 1930s
73 Cobweb Theory of Business Cycle H. Schultz, J. Tinbergen, U. Ricci 1930
74 Samuelson’s Model Samuelson
75 Real Business Cycle Kydland, Prescott, Barro & King, Long & 1980s
Plosser
76 Goodwin’s Trade Cycle Goodwin 1951
77 Keynes’s Theory Keynes 1930s
78 Kaldor’s Theory of Trade Cycle Kaldor 1940
79 Hick’s Theory of Trade Cycle Hicks 1950
Other
80 Insider & Outsider Theory of Labor Market A. Lindback & D. Snower
81 IS-LM model J.R. Hicks & Alvin H. Hansen 1937
82 Philips Curve A. W. H. Phillips 1958
83 Monetary Approach to BOP Hahn 1959
84 Mundell Fleming Model Robert Mundell and Marcus Fleming 1960
85 Optimum Currency Area Robert Mundell 1960
86 Expectation Augmented Philips Curve · Milton Friedman 1966,68
· Edmund Phelps 1967,68,70
87 Implicit Contract Theory Baily & Azariades 1979
88 Asymmetric Information Model Grossman & Hart 1981
Concepts Associated Economists /Commission
1 American Keynes (nick name) Hicks
2 Box Diagram Edgeworth
3 Cannon of Taxation Adam Smith
4 Capital Accumulation Joan Robinson
5 Circular Causation Myrdal
Consumption multiplier Brahmananda & Vakil
6 Cobweb Theorem N. Kaldor
7 Conspicuous Consumption Veblen
8 Consumer Surplus Alfred Marshall
9 Creative Destruction in Economics J. Schumpeter
(popularized)
10 Cumulative Causation Myrdal
11 Deficit Financing (popularized by) J.M. Keynes
12 Demonstration Effect Duesenberry
13 Dialectical Materialism Karl Marx
14 Differential Incidence Musgrave
15 Disguised Unemployment Ragnar Nurkse(D M) Term coined by Joan Robinson
/V K R V Rao ,Vakil & Brahmananda,K N Raj Indian
version
16 Division of Labor Adam Smith
17 Doctrine of Sound Finance Classical Economists
18 Duopoly Analysis Cournot
19 Effective Demand Keynes
20 Elasticity of Demand Alfred Marshall
21 Elasticity of Substitution Minhas
22 Equation of Exchange Fisher
23 Expenditure Reducing Policy Harry Johnson (1961)
24 Expenditure Switching Policy Harry Johnson (1961)
25 Founder of Austrian School Karl Menger (1840-1921)
26 Functional Finance Lerner
27 Golden Age Joan Robinson
28 Golden Rule of Accumulation Edmund Phelps
29 Hindu Rate of Growth Raj Krishna
30 Immiserizing Growth Jagadish Bhagawati
31 Indivisible Hand Adam Smith
32 Infant Industry Alexander Hamilton
33 Intra-industry J.S. Mill
34 Inverted U- Shaped Curve Kuznets
35 Investment Multiplier Keynes
36 Involuntary Unemployment Keynes
37 Joint Sector Dutt Committee
38 Knife Edge Problem Harrod- Domer
39 Labor Theory of Value Adam Smith & Ricardo
40 Law of Demand Alfred Marshall
41 Leaky Bucket Okun
42 Learning by Doing Arrow
43 MEC Keynes
44 National Income Accounting Richard Stone
45 Offer Curve Alfred Marshall
46 Okun’s Law Arthur Okun (1961)
47 Opportunity Cost Haberler
48 People Plan M.N. Roy
49 Permanent Consumption Friedman
50 Principle of Effective Market Mundell
Classification
51 Product Differentiation Chamberlin
52 Protectionism Mercantilism
Frederick List
53 Protestant Ethic Max Weber
54 Public Good Musgrave
55 Pumb Priming Roosevelt
56 Rational Expectation Johy Muth (1961)
57 Regression Francis Galton
58 Rolling Plan Gunnar Myrdal
59 SDR IMF
Saving potential Nurkse
60 Selling Cost Chamberlin
61 Shadow Price Jan Tinbergen
62 Square Root Formula Baumol
63 Stationary State Adam Smith
64 Supply Side Economics Arthur Laffer
65 Surplus Value Marx
66 Sustainable Development Brudtland
67 Third World Frantz Fanon
68 Transitory Income Friedman
69 Wage –Good (firstly introduced) Pigou