Acceleration Principle
The acceleration principle has been proposed as a theory of investment demand as well as a theory determining the supply of capital goods. When combined with the multiplier, it has played a very important role in models of the business cycle as well as in
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Hermann, Friedrich Benedict Wilhelm von (1795-1868) Hermann was born in Dinkelsbuhl, Germany. His career spanned the half-century or more in which German economics came to terms with English classical political economy, first welcoming it and then rejecting it, particularly in its Ricardian variety. After teaching mathematics in a secondary school, Hermann was appointed to the chair in what was still called Kameralwissenschaften [Cameralism] - an old title soon to be discarded - at the University of Munich in 1827. He made his reputation with Staatswirthschaftliche Untersuchungen [Investigations into Political Economy] (1832), a book which owed much to The Wealth of Nations but little to the writings of either Malthus or Ricardo. The book was organized around the simple but appealing idea that all economic variables are the outcome of the forces of demand and supply, so that economic analysis consists essentially of an investigation of the factors lying behind demand and supply. The book revelled in endless definitions and classifications of types of goods, wants, costs, capitals, and so on, but did not clutter the analysis with endless attacks on the deductive method of the English school. Together with Rau (1792-1870), Hermann thereby laid the foundations on which Mangoldt (1824-68) and Thiinen (1783-1850) were soon to build a German brand of classical economics. No wonder Marshall much admired 'Hermann's brilliant genius' and frequently quoted Hermann's treatise in his own Principles of Economics (1890). Hermann became a Director of the Bavarian Statistical Bureau in 1839 and organized the first official life table covering an entire German state. As a member of the Frankfurt Parliament in 1848, he advocated the unification of all German states. MARK BLAUG
first edition of his book on this topic was called The Economic Life of Primitive Peoples (1940), the revised edition being Economic Anthropology (1952). Herskovits is best remembered by economic anthropologists for his views on a theoretical issue of importance that arose in his controversy with Frank Knight, who reviewed the 1940 edition of Herskovits's book. In the 1940 edition, Herskovits criticized the conventional economics of Marshallian microtheory for its uselessness to anthropologists trying to understand the underlying principles which explain the working of primitive economies - such as African tribal economies not yet changed by European colonial rule- primitive economies lacking capitalism's core attributes of machine technology, modern money, and market organization for the transaction of inputs and outputs. In his book review, Frank Knight criticized Herskovits for misunderstanding the 'abstract' and 'intuitive' nature of economic theory. (I doubt that Knight's portrayal of economics, as stated there, would be shared today by many economists.) Knight's review, together with a rejoinder by Herskovits, are reprinted in Economic Anthropology (1952). The relevance of conventional economic theory to the analysis of pre-industrial, n
