Arthur Cecil Pigou was a Fellow of King's College, Cambridge. His notion of the "real balance effect" (the "Pigou effect") contended that employement was stimulated by a fall in prices, because the latter increased liquid wealth and thus demand for goods and services.

At King's College, Pigou met the young student Wilfrid Noyce, a boy who was 41 years younger than him, and started a relationship with him. Pigou introduced Noyce to mountaineering and took him to the Alps. When the War started Noyce and Pigou joined the Friends' Ambulance Corps.

An illness affecting his heart developed in the early nineteen-thirties, however, and this affected his vigour, curtailing his climbing and leaving him with phases of debility for the rest of his life. Pigou gave up his professor's chair in 1943, but remained a Fellow of King's College until his death. In his later years he gradually became more of a recluse, emerging occasionally from his rooms to give lectures or to take a walk.