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Abba P. Lerner

Abraham "Abba" Ptachya Lerner (also Abba Psachia Lerner;[1][2] 28 October 1903 – 27 October 1982) was a Russian-born American-British economist.

Abba P. Lerner

Abraham Ptachya Lerner

(1903-10-28)28 October 1903
Novoselytsia, Bessarabia, Russian Empire

27 October 1982(1982-10-27) (aged 78)

Tallahassee, Florida, United States

Russian-British-American

Economics

Post-Keynesian economics

London School of Economics

Friedrich Hayek, John Maynard Keynes, Paul Samuelson, Oskar R. Lange

Biography[edit]

Born in Novoselytsia, Bessarabia, Russian Empire,[3] Lerner grew up in a Jewish family, which emigrated to Great Britain when Lerner was three years old. Lerner grew up in London's East End and from age 16 worked as a machinist, a teacher in Hebrew schools, and as an entrepreneur. In 1929, Lerner entered the London School of Economics, where he studied under Friedrich Hayek. A six-month stay at Cambridge in 1934–1935 brought him into contact with John Maynard Keynes. In 1937, Lerner emigrated to the United States.[4][5] While in the US, he befriended intellectual opponents Milton Friedman and Barry Goldwater.[6]


Lerner never stayed at one institution long, serving on the faculties of nearly a dozen universities and accepting over 20 visiting appointments.[7] Lerner was 62 when he was given a professorship at the University of California, Berkeley in 1965 and left after reaching mandatory retirement age six years later.[7] During his time there, Lerner criticized the unrest caused by the student protests as a threat to academic freedom.[7]


Abba Lerner taught in the Economics Department at Florida State University, for several years. He stopped teaching after he suffered a stroke while visiting Israel.


Although Lerner never received the Sveriges Riksbank's Nobel Memorial Prize in Economic Sciences, he has been recognized as one of the greatest economists of his era.[8]

Lerner developed a model of which featured decentralised market pricing proportional to marginal social cost[9][10][11] and in so doing contributed to the Lange–Lerner–Taylor theorem.[12]

market socialism

Lerner contributed to the idea of a by incorporating it into Oskar R. Lange's original model of socialism, where the social dividend would be distributed to each citizen as a lump-sum payment.[13]

social dividend

The use of and monetary policy as the twin tools of Keynesian economics is credited to Lerner by historians such as David Colander.[14]

fiscal policy

The states that an import tariff can have the same effects as an export tax.[15][16]

Lerner symmetry theorem

The measures potential monopoly power as mark-up of price over marginal cost divided by price or equivalently the negative inverse of demand elasticity.[17]

Lerner index

Lerner improved a formula of , which is known since as the Marshall–Lerner condition.[18]

Alfred Marshall

Lerner improved the calculations made by on the effect of terms of trade.

Wilhelm Launhardt

Lerner developed the concept of , which argued that economic equality will produce the greatest probable total utility with a given amount of wealth.[19]

distributive efficiency

Based on and chartalism, Lerner developed functional finance, a theory of purposeful financing (and funding) to meet explicit goals, including full employment. This is in contrast to “sound finance” principles where taxation is designed solely to fund expenditure or finance investment and low inflation.[20]

effective demand

The goes back to Lerner.[21][22]

Lerner–Samuelson theorem

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"Abba Lerner"

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"Abba Lerner"

. The Concise Encyclopedia of Economics. Library of Economics and Liberty (2nd ed.). Liberty Fund. 2008.

"Abba Ptachya Lerner (1905–1982)"

Mathew Forstater (July 1999). . Working Paper. No. 272. The Jerome Levy Economics Institute.

"Functional Finance and Full Employment: Lessons from Lerner for Today?"

(1994). Biographical Memoirs Volume 64. Washington, DC: National Academies Press. pp. 209–230. ISBN 978-0-309-04978-8. Retrieved 8 April 2017.

David Landes