FLUTUAÇÕES, EMPREGO E A TRADIÇÃO CLÁSSICA EM PIGOU

This paper assesses Pigou's theories of industrial fluctuations and employment according to the orthodoxy prevailing in the 20's and 30's of the twentieth century. Firstly, we review the conceptions on the economic cycle prevailing during the inter-war years and their inner connections with the classical thought. After that, we investigate how the original pigovian viewpoint about industrial fluctuations evolves towards a theory of aggregate employment, with special attention to the role played by public expenditure, wage rigidity and investment. At the same time, the classical roots of Pigou's approach are examined in order to confront it, in the end, with Keynes' critique.