IS-LM and the multiplier: A dynamic general equilibrium model
AbstractWe construct in this paper a dynamic general equilibrium model which displays the central features of the IS-LM model, and notably an income multiplier greater than one, so that crowding out does not occur. It appears that the key to this result is the conjunction of two features of our model: price rigidities (as is usually expected), but also a non-Ricardian economy.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 96 (2007)
Issue (Month): 2 (August)
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Web page: http://www.elsevier.com/locate/ecolet
Other versions of this item:
- Jean-Pascal Bénassy, 2006. "IS-LM and the multiplier: A dynamic general equilibrium model," PSE Working Papers halshs-00590513, HAL.
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