Richard George Lipsey is a Canadian economist born in 1928, who has been Professor at Simon Fraser University for most of his academic career. He has also held professorial posts at the London School of Economics, Essex University and Queen’s University in Kingston, as well as visiting professorships at Yale, the University of California at Berkeley, Manchester, and the University of British Columbia.
Richard Lipsey is mostly known for his article, co-authored with Kelvin Lancaster “The General Theory of Second Best”, 1956, in which they postulated the theory of second best, which aims at finding an optimum when Pareto optimality cannot be found. The main idea in their article is that, when a constraint prevents the fulfilment of one of the conditions required to obtain an optimum equilibrium, the other conditions are in general no longer desirable. The optimum situation in this case can be attained only by neglecting the other conditions. Indeed, this new optimum is called “second best” because a Paretian optimum cannot be attained.
Other of his notorious contributions to economic science includes expanding on the mathematics concerning the Phillip’s curve as well as carrying out further econometrical tests. However, for the most part of his career, Richard Lipsey has centred his work on welfare economics, especially on the analysis of positive economics.