Nicholas Kaldor

Who was Nicholas Kaldor?

Nicholas Kaldor, Baron Kaldor was one of the foremost Cambridge economists in the post-war period. He developed the famous "compensation" criteria called Kaldor–Hicks efficiency for welfare comparisons, derived the famous cobweb model and argued that there were certain regularities that are observable as far as economic growth is concerned, Kaldor's growth laws. Kaldor worked alongside with Gunnar Myrdal to develop the key concept Circular Cumulative Causation, a multicausal approach where the core variables and their linkages are delineated. Both Myrdal and Kaldor examine circular relationships, where the interdependencies between factors are relatively strong, and where variables interlink in the determination of major processes. Gunnar Myrdal got the concept from Knut Wicksell and developed it alongside with Nicholas Kaldor when they worked together at the United Nations Economic Commission for Europe. Myrdal concentrated on the social provisioning aspect of development, while Kaldor concentrated on demand-supply relationships to the manufacturing sector. Kaldor also coined the term "convenience yield" related to commodity markets and the so-called theory of storage, which was initially developed by Holbrook Working.