Beyond the Dark Clouds: Pigou and Coase on Social Cost
Author(s)
Aslanbeigui, Nahid; Medema, Steven G.
Abstract
It is well known that the boundaries of the modern analysis of externalities were defined by A.C. Pigou’s “Economics of Welfare” and Ronald H. Coase’s “Problem of Social Cost.” Although Pigou’s approach is well though-out than Coase’s, both offer pragmatic approaches to the analysis of externalities. However, their understanding that the government can improve market failures is inductive of their similarities.
