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 InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 18764.
Date of creation: 21 Apr 2009
Date of revision: 09 Sep 2009
Disequilibrium Multiplier Pigou Effect;
Other versions of this item:
- Luis Carlos Corchón, 2010. "The Keynesian multiplier and the Pigou effect under substitution between private and public consumption," Economics Bulletin, AccessEcon, vol. 30(1), pages 829-836.
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
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