Arthur Cecil Pigou

Arthur Cecil Pigou

Arthur Cecil Pigou (18 November 1877 – 7 March 1959) was a British economist known for his work in welfare economics. He was a prominent figure in the early 20th century and made significant contributions to the field of economics, particularly in the areas of externalities and public finance.

Early life and education

Arthur Cecil Pigou was born in Ryde, Isle of Wight, England. He was educated at Harrow School and later attended King's College, Cambridge, where he studied under the renowned economist Alfred Marshall. Pigou excelled in his studies and was awarded a fellowship at King's College in 1902.

Academic career

Pigou succeeded Alfred Marshall as the Professor of Political Economy at the University of Cambridge in 1908. During his tenure, he developed many of the ideas that would form the basis of welfare economics. His work focused on how economic policies could improve social welfare and address market failures.

Welfare economics

Pigou's most influential work, "The Economics of Welfare," published in 1920, laid the foundation for the study of welfare economics. In this work, Pigou introduced the concept of Pigovian taxes, which are taxes imposed on activities that generate negative externalities, such as pollution. He argued that such taxes could correct market failures and lead to a more efficient allocation of resources.

Externalities

Pigou was one of the first economists to systematically analyze the concept of externalities. He distinguished between private and social costs and benefits, highlighting how market transactions can have unintended effects on third parties. His analysis of externalities has had a lasting impact on environmental economics and public policy.

Later life and legacy

Pigou continued to teach and write until his retirement in 1943. He remained active in academic circles and contributed to various economic debates of his time. Pigou's work on welfare economics and externalities has influenced generations of economists and policymakers.

Related pages

• Welfare economics
• Externality
• Pigovian tax
• Alfred Marshall