This article give history and discusses the importance of economist Arthur Cecil Pigou. His views are very applicable in today's economy. Pigou was the premier economist to consider social costs (today termed 'externalities') and how they should be considered in weighing the costs and benefits of a project. Pigou introduced the idea of marginal external cost which in tern founded the idea of a "Pigouvian Tax." Pigouvian taxes are being used in different forms today such as taxes on emissions from businesses.
Current day economist, Greg Mankiw, is a fan of Pigou and even started an informal Pigouvian Club. The article also briefly discusses how Obama is a Pigouvian whether he knows it or not.
Reading this article will give you a good picture of the pivotal economists in the last 100 years.
1 comment:
After reading this article I have learned about an economist that I have never heard of. Pigou has contributed a lot to the world of economics including the study of market failure. He seemed to believe that capitalism works most of the time but that it has consequences in other parts of the economy. Pigou is an economist that I wish I had learned about prior to reading this article.
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