The Keynesian multiplier and the Pigou effect under substitution between private and public consumption
AbstractIn this paper we present a fixprice model in which private and public consumption show some degree of substitution. We offer formulae for the Keynesian multiplier which depend on this degree of substitution. We also show that there is a Pigou effect and that, sometimes, this effect is larger than the Keynesian multiplier.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 30 (2010)
Issue (Month): 1 ()
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Keynes; Multiplier; Unemployment; Pigou;
Other versions of this item:
- Corchon, Luis, 2009. "The Keynesian multiplier and the Pigou effect under substitution between private and public consumption," MPRA Paper 18764, University Library of Munich, Germany, revised 09 Sep 2009.
- E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
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