Arthur Pigou

The State should aim at a more equal distribution of wealth, provided that it does not unduly impair the incentives to production.

The concept of 'social cost' includes not only the private costs of production, but also the external costs imposed on society.

The 'Pigou effect' refers to the stimulating effect of falling prices on aggregate demand through an increase in the real value of money balances.

The trade cycle is a phenomenon of alternating periods of prosperity and depression.

The causes of industrial fluctuations are complex and varied, but they can be broadly classified into real and monetary factors.

The State has a role to play in mitigating the severity of trade cycles through appropriate monetary and fiscal policies.

The concept of 'economic welfare' is broader than mere material well-being; it includes all factors that contribute to human happiness.

The State should provide public goods, which are goods that are non-rivalrous and non-excludable.

The optimal provision of public goods requires collective action, as the market mechanism alone will lead to under-provision.

The 'Pigovian tax' is a tax levied on activities that generate negative externalities, in order to internalize the external costs.

The 'Pigovian subsidy' is a subsidy granted to activities that generate positive externalities, in order to encourage their production.

The problem of unemployment is not merely a matter of insufficient demand; it is also a matter of structural rigidities in the labour market.

The long-run equilibrium of the economy is characterized by full employment and a stable price level.

The State should intervene to stabilize the economy and to prevent excessive fluctuations in output and employment.

The concept of 'national income' is a measure of the total value of goods and services produced in an economy over a given period.

The distribution of national income is a matter of both economic efficiency and social justice.

The State should use its powers of taxation and expenditure to promote a more equitable distribution of income and wealth.

The 'welfare state' is a system in which the government plays a significant role in providing social services and promoting the well-being of its citizens.

The role of the economist is not merely to describe economic phenomena, but also to prescribe policies that will improve human welfare.

The 'invisible hand' of the market, while powerful, is not always sufficient to achieve optimal social outcomes.