Pigou on the microeconomics of speculation: Institutions and economic welfare.
This paper examines Arthur Cecil Pigou's microeconomic analysis of speculation. Although Pigou's treatment of speculation has been examined insofar as it relates to his theory of the business cycle, his microeconomic analysis of speculation has received very little attention from historians of econo...
| Published in: | Cambridge Journal of Economics Vol. 50; no. 4; pp. 627 - 649 |
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| Format: | Article |
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Oxford University Press / USA
Jul2026
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| Online Access: | View this record in EBSCOhost |
| Summary: | This paper examines Arthur Cecil Pigou's microeconomic analysis of speculation. Although Pigou's treatment of speculation has been examined insofar as it relates to his theory of the business cycle, his microeconomic analysis of speculation has received very little attention from historians of economic thought. This paper contributes to the literature by illustrating how Pigou's microeconomic analysis of speculation fits within his landmark economic welfare framework. More specifically, it sheds light on an overlooked institutional theme therein—namely, that his assessment of the welfare consequences of speculation depends crucially upon the nature of the institutional context within which that activity takes place. This paper not only provides a more faithful representation of Pigou's microeconomic treatment of speculation but also highlights some of its more fruitful aspects with relevance for modern economic analysis. |
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