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The disagreement between A. C. Pigou and Ronald Coase arose because

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The disagreement between A. C. Pigou and Ronald Coase arose because

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Pigou argued that the government should ban all externality-generating activities, while Coase thought that taxes and subsidies should be used instead.

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Coase argued that the government should ban all externality-generating activities, while Pigou thought that taxes and subsidies should be used instead.

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Pigou argued that the government should use taxes and subsidies to adjust for externalities, while Coase proposed a market solution to the externality problem.

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Coase argued that the government should use taxes and subsidies to adjust for externalities, while Pigou proposed a market solution to the externality problem.

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Economics

Edition: 12^th

Author: Arnold

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