IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Samuelson's multiplier-accelerator model revisited

  • Frank Westerhoff

As demonstrated by Samuelson, the interplay between the multiplier analysis and the principle of acceleration may generate temporary business cycles. We extend Samuelson's seminal framework in the sense that investors now apply a nonlinear mix of extrapolative and regressive expectation formation rules to predict changes in national income. As it turns out, the emergence of booms and slumps may depend on the sentiment of the investors. If they are optimistic (pessimistic), the economy performs well (badly). Moreover, the model produces sustained and intricate fluctuations in economic activity for realistic values of the marginal propensity to consume and the capital to output ratio.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 13 (2006)
Issue (Month): 2 ()
Pages: 89-92

in new window

Handle: RePEc:taf:apeclt:v:13:y:2006:i:2:p:89-92
Contact details of provider: Web page:

Order Information: Web:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Puu, Tonu & Gardini, Laura & Sushko, Irina, 2005. "A Hicksian multiplier-accelerator model with floor determined by capital stock," Journal of Economic Behavior & Organization, Elsevier, vol. 56(3), pages 331-348, March.
  2. Sonnemans, J. & Hommes, C.H. & Tuinstra, J. & van de Velden, H., 1999. "The Instability of a Heterogeneous Cobweb economy: a Strategy Experiment on Expectation Formation," CeNDEF Working Papers 99-06, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
  3. Cecilia Chaing & Lindsay McSweeney, 2010. "A Behavioral Model of Rational Choice," CPI Journal, Competition Policy International, vol. 6.
  4. Takatoshi Ito, 1988. "Foreign Exchange Rate Expectations: Micro Survey Data," NBER Working Papers 2679, National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:13:y:2006:i:2:p:89-92. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.