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Arthur Cecil Pigou (/ ˈ p iː ɡ uː /; 18 November 1877 – 7 March 1959) was an English economist.As a teacher and builder of the School of Economics at the University of Cambridge, he trained and influenced many Cambridge economists who went on to take chairs of economics around the world.
The Pigou effect was first popularised by Arthur Cecil Pigou in 1943, in The Classical Stationary State an article in the Economic Journal. [4] He had proposed the link from balances to consumption earlier, and Gottfried Haberler had made a similar objection the year after the General Theory's publication. [5]
A. C. Pigou was at the time the sole economics professor at Cambridge. He had a continuing interest in the subject of unemployment, having expressed the view in his popular Unemployment (1913) that it was caused by "maladjustment between wage-rates and demand" [47] – a view Keynes may have shared prior to the years of the General Theory.
Unemployment was the main reason for wage subsidy. According to the classical theory of unemployment, unemployment is the consequence of distortions of the labour market at the low end of the salary range. A worker will be taken on by an employer so long as his or her economic value is greater than the cost of employment (which lies largely in ...
Professor Pigou's theory runs, to a quite amazing extent, in real terms... The ordinary classical economist has no part in this tour de force. But if, on behalf of the ordinary classical economist, we declare that we would have preferred to investigate many of those problems in money terms, Mr. Keynes will reply that there is no classical ...
In Wicksell's theory, cumulative inflation will occur when technical innovation causes the natural rate to rise or when the banking system allows the market rate to fall. Cumulative deflation occurs under the opposite conditions causing the market rate to rise above the natural. [2]
However, Pigou retained free market beliefs, and in 1933, in the face of the economic crisis, he explained in The Theory of Unemployment that the excessive intervention of the state in the labor market was the real cause of massive unemployment because the governments had established a minimal wage, which prevented wages from adjusting ...
Sweezy's first formally published paper on economics was a 1934 article entitled "Professor Pigou's Theory of Unemployment," published in the Journal of Political Economy in 1934. [3] Over the rest of the decade Sweezy wrote prolifically on economics-related topics, publishing some 25 articles and reviews. [3]