Nell's contributions are in the field of macroeconomic theory, monetary analysis and finance, economic methodology and philosophy, and development.
Nell attended Princeton University (1954–1957) and received his B.A magna cum laude in 1957 (in the Woodrow Wilson School).
Nell then stayed at Nuffield College (1959–1962), Oxford University, to do his advanced work on the foundations of economic analysis, complete his doctoral thesis and further develop his research.
[8] Lavoie, D. C. (1977, p. 325)[9] argued thatTo the devastating critiques of positivism by such philosophers as Brand Blanshard, W. V. Quine, S. Toulmin, A. R. Lousch and Karl Popper, can now be added that of Professors Hollis and Nell.
They dissect the textbook combination of neo-Classicism and Positivism, so crucial to the defence of orthodox economics against now-familiar objections.
Not only for its widely accepted benefits for economic efficiency, but because he believes that the land market contributes to inequality and financial instability.
3–4)[13] argued that As early 1967, Nell had published a paper on Wicksell's monetary circuit in the Journal of Political Economy.
There, he explored several of the questions that were to become the prime focus of the French circuit theories, and that were highlighted again, first in a little-known working paper (Nell, 1986), and then in the highly successful book that he edited with Ghislain Deleplaces in 1996, Money in motion....In his 1967 paper on monetary circulation within a Wickselian framework, Nell took into account the impact of interest payments on aggregate demand and on the closure of the monetary circuit.
In many ways Nell's approach goes back to Francois Quesnay; where money traced out the transactions between the different classes and sectors of society.
Although Wassily Leontief was best known for his 'Input Output Mode', a major contribution to economic analysis could be found in his doctoral thesis, done in 1928 at the University of Berlin, on 'Economics as a Circulation' (in German "Wirtschaft als Kreislauf.
It finally pulls the story of monetary circulation together, detailing how the pressures of transformational growth – including the emergence of fixed capital and the finance necessary for it — led to systematic changes first in the monetary system, then in banking, with the result that the way the interest rate is determined changed significantly.
[14] The first statement of the theory of transformational growth came in 1988 in his book Prosperity and Public Spending, laying out the idea that markets worked differently when technology was craft-based.
[15] The full development of the theory of transformational growth came in the 90s, and was published as The General Theory of Transformational Growth (Cambridge University Press, 1998), starting from a critique of equilibrium –supporting creative destruction instead – working through methodological and philosophical questions about the role of contracts and obligations in understanding the persistence of institutional structures, to the circulation of money, understanding productivity and the structure of production – especially the relationship between the wage bill of capital goods and the capital requirements in consumer goods – then going on to dynamics, and from there to aggregate demand and the business cycle.
Finally the book concludes by examining the interactions between economic forces and pressures and the changing character of social institutions.
In each stage the working of markets will be governed in part by the structure of costs and the pattern of growth in demand, both of which depend on technology and innovation.
However, transformational growth rejects the idea of a steady state and presents a model of multiple sectors regularly changing in size and importance.
Intrinsically innovative, uneven across sectors and countries, and evolving through qualitative changes in institutional structure, development involves such complexity that major insights, including those of Marx, Veblen, Schumpeter, and Chandler, often come from outside formal theory.
Nell portrays development as a cumulative process in which economic institutions and technologies evolve in a single, mutually engendering dynamic.
This process imparts a direction to capitalist development as sectors rise and fall, production is reorganized, and markets are reshaped.
Furthermore, Geoffrey M. Hudgson (2004)[18] argued that: Edward Nell's rich and enlightening The General Transformational Growth (1998) has over seven hundred pages and cites many authors.
In contrast to many conventional theories, the economic analysis which supports the transformational growth perspective is not based primarily on rational choice.
[20][21] Nell's published and unpublished papers dealing with these and other issues were collected in his 1992 book (Transformational Growth and Effective Demand, New York University Press, 1992).
When the 1992 book came out it was supported by a separate volume, published by Nell in 1998 (Transformational Growth and the Business Cycle, London: Routledge, 1998).
The book contained the work of a study group of New School students, testing the empirical validity of the approach, by examining the time series of prices, wages, employment, output and productivity in six countries.
A further implication of transformational growth is that if there is substantial mobility of labor and capital, exchange rates will deviate from purchasing power parity only because of speculative pressures.
In other words, a universal currency, such as that proposed by Robert Mundell, would not only be desirable, it would appear to be a natural culmination of the processes of transformational growth.
[25] More recently, Nell has worked with his two colleagues Federico Mayor Zaragoza and Karim Errouaki on Reinventing Globalization after the Crash (forthcoming in 2015).