The Keynesian multiplier and the Pigou effect under substitution between private and public consumption
In 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.
Volume (Year): 30 (2010)
Issue (Month): 1 ()
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- Dreze, Jacques H, 1975.
"Existence of an Exchange Equilibrium under Price Rigidities,"
International Economic Review,
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- Jean-Pascal Bénassy, 2007. "Ricardian equivalence and the intertemporal Keynesian multiplier," Post-Print halshs-00754250, HAL.
- Benassy, Jean-Pascal, 2007. "Ricardian equivalence and the intertemporal Keynesian multiplier," Economics Letters, Elsevier, vol. 94(1), pages 118-123, January. Full references (including those not matched with items on IDEAS)
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