• Lerner developed a model of
market socialism which featured decentralised market pricing proportional to
marginal social cost and in so doing contributed to the
Lange–Lerner–Taylor theorem. • Lerner contributed to the idea of a
social dividend 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. • The use of
fiscal policy and
monetary policy as the twin tools of
Keynesian economics is credited to Lerner by historians such as
David Colander. • The
Lerner symmetry theorem states that an import tariff can have the same effects as an export tax. • The
Lerner index measures potential monopoly power as
mark-up of price over
marginal cost divided by price or equivalently the negative inverse of
demand elasticity. • Lerner improved a formula of
Alfred Marshall, which is known since as the
Marshall–Lerner condition. • Lerner improved the calculations made by
Wilhelm Launhardt on the effect of
terms of trade. • Lerner developed the concept of
distributive efficiency, which argued that economic equality will produce the greatest probable total
utility with a given amount of wealth. • Based on
effective demand 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. • The
Lerner–Samuelson theorem goes back to Lerner. == References ==