In the ideological debate among economists (and economics enthusiasts), participants generally sort themselves into two camps: followers of Milton Friedman or John Keynes. Evidence of the influence of both is present in today’s US economic policy: the monetary policies pursued by the Fed line up with Friedman’s advice, while fiscal stimulus is a classic Keynesian strategy.
Yet the Wall Street Journal points out there may be one overlooked economist whose theories of market failure seem eerily apt in the context of the current economy — and, his views are gaining attention from all economic camps. Arthur Cecil Pigou, a contemporary of Keynes at Cambridge University in the 1920s, is regaining favor among academics and even political types impressed with his practical approach, which seems to combine the best of free-market theories with intuitively satisfying examination of unintended effects of certain market activities and actions (a most notable example being the impact banking industry actions can have elsewhere in the economy).
For more on Pigou, read the recent WSJ article, contributed by John Cassidy of The New Yorker.