Sir John Richard Hicks - Theories

Sir John Hicks looked at the role of the accelerator theory in affecting growth and income and came to conclusions similar to those of Harrod, that the accelerator may induce various fluctuations in the level of output.

He also developed the IS-LM model. This is a way of modelling equilibrium in the economy by looking at equilibrium in the goods and services markets (the IS curve) and equilibrium in the money markets (LM curve). Where both these markets are in equilibrium will be the equilibrium level of output. The IS-LM model looks at output against the rate of interest:

Hicks used this model to explore the assumptions concerned with investment, savings and the supply and demand for money. It has become a widely accepted alternative framework to standard Keynesian analysis.

For more details on the interaction between the accelerator and the multiplier, you may want to look at the theories section about Sir Roy Harrod.

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