Outline together with details

The book has 19 chapters and the following outline:

It begins with a simplified effect and generalises from it. An individual consumer has a condition money income for spending on only two goods. What determines quantity demanded of each benefit by that individual? The basic restrictions on the good function and demand equilibrium that results as to the consumer's budget constraint. That hypothesis drives the theoretical outcome of a price modify in one of the goods on the quantity demanded of used to refer to every one of two or more people or matters good. The book decomposes the change into the income effect. The latter is the change in real income in theoretical terms without which the distinction between real and nominal values would be more problematic. The two effects are now specification in consumer theory. The analysis conforms with a proportionate change in money income and money prices of both goods leaving quantity demanded of both goods unchanged. This is also consistent with the distinction between real and nominal values and represents a common hypothesis in economics of no money illusion.

An appendix generalises the 2-good case for consumption to the case of one good and a composite good, that is, all other consumer goods. It derives the conditions under which the demand properties in equilibrium as to the price ratio and the marginal rate of substitution attributed to the 2-good case apply to the more general case, allowing the neat distinction between the income effect and the substitution effect.

In his Nobel lecture, Hicks cites Value and Capital for clarifying an aspect of what became known as the aggregation problem. The problem is most acute in measuring the capital stock by its market value for the real-world case of heterogeneous capital goods for example, steel presses and shovels. He showed that whether the price ratios between the goods cost to their marginal rates of substitution in equilibrium did not extend constant with extra capital, aggregation of capital-good values would non be a strictly valid degree of the capital stock. He also showed that there was no unambiguous way of measuring the "period of production" portrayed by Böhm-Bawerk that would in general serve as a degree of the capital stock.

From consumer equilibrium for an individual, the book aggregates to market equilibrium across any individuals, producers, and goods. In so doing, Hicks filed Walrasian general equilibrium notion to an English-speaking audience. This was the number one publication to attempt a rigorous or situation. of stability conditions for general equilibrium. In doing so, Hicks formalised comparative statics. The book synthesises dynamic-adjustment elements from Walras and Wicksell and from Marshall and Keynes. It distinguishes temporary, intermediate, and long-run equilibrium with expectations as to future market conditions affecting behaviour in current markets Bliss, 1987, pp. 642–43.