Monday, November 30, 2009

Expanding Our "Who's Who"

The current economy has given teachers ample opportunity to reference the "big names" in economic theory - Smith, Keynes, Friedman, Samuelson. It has even provided some renewed interest in less-known although not less-important thinkers like Fisher and Schumpeter.

But what has made this recession truly remarkable has been the increased public notice given to those whose names are generally known only to students of economic thought or referenced in articles read only by other economists. Two of the names in this latter category are Hyman Minsky and Arthur Cecil Pigou. (I admit to knowing nothing about Minsky until a few months ago, and only a little about Pigou.)  The fact that these names have come in to the public light means that you, being an interested economic educator, may have seen them referenced. You may have done some research on them. You may even have seen the two articles I am about to discuss.

The first is on Hyman Minsky and appeared back in September in The Boston Globe. Minsky was a Keynesian, and wrote about poverty and financial systems. It is his focus on the latter that many are citing in the current wave of Minsky popularity. He believed that financial instability was inherent to the capitalist system, and he saw debt as a significant factor in financial instability. The over-issuance of products like mortgage-backed securities and collaterlized-debt obligations (MBS and CDO) would certainly seem to fit the bill.

The second was in The Wall Street Journal (free content at this writing) this past weekend, and is about Arthur Cecil Pigou. Pigou was a contemporary of Keynes but not a Keynesian. He was the designated successor to Alfred Marshall and, as such, is considered a member of the neo-classical school. However, what is bringing him to the spotlight now is his work on social costs or externalities, as they are now called. His focus on that aspect of markets and market decisions makes him particularly relevant for discussions about health care, global warming, and even the financial crisis. And I’m sure many of you are already aware of Greg Mankiw’s Pigou Club.

I would welcome any leads to other articles of note on either of these economists.


Julie said...

The WSJ article was posted in my classroom this morning. So much to impart to students and so little time as the semester is winding down.
We end as we began, WITH SCARCITY. (of time ;(

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