Pigou effect

Pigou effect definition - business

Pigou effect

The economic theory of English economist Arthur Pigou that falling prices stimulate consumption, thereby boosting an economy's income and employment. Pigou contended that consumption is based on real net wealth, not current income.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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