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.
|Date of creation:||21 Apr 2009|
|Date of revision:||09 Sep 2009|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
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- Linnemann, Ludger & Schabert, Andreas, 2004. "Can fiscal spending stimulate private consumption?," Economics Letters, Elsevier, vol. 82(2), pages 173-179, February.
- Barro, Robert J, 1981.
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- Barro, Robert J., 1981. "Output Effects of Government Purchases," Scholarly Articles 3451294, Harvard University Department of Economics.
- Benassy, Jean-Pascal, 2007. "Ricardian equivalence and the intertemporal Keynesian multiplier," Economics Letters, Elsevier, vol. 94(1), pages 118-123, January.
- Jean-Pascal Benassy, 1975. "Neo-Keynesian Disequilibrium Theory in a Monetary Economy," Review of Economic Studies, Oxford University Press, vol. 42(4), pages 503-523.
- Silvestre, Joaquim, 1982. "Fixprice analysis in exchange economies," Journal of Economic Theory, Elsevier, vol. 26(1), pages 28-58, February.
- Dreze, Jacques H, 1975. "Existence of an Exchange Equilibrium under Price Rigidities," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 16(2), pages 301-320, June.
- DREZE, Jacques H., "undated". "Existence of an exchange equilibrium under price rigidites," CORE Discussion Papers RP 225, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Jean-Pascal Bénassy, 2007. "Ricardian equivalence and the intertemporal Keynesian multiplier," Post-Print halshs-00754250, HAL.
- Heijdra, Ben J & Ligthart, Jenny E & van der Ploeg, Frederick, 1998. "Fiscal Policy, Distortionary Taxation, and Direct Crowding Out under Monopolistic Competition," Oxford Economic Papers, Oxford University Press, vol. 50(1), pages 79-88, January. Full references (including those not matched with items on IDEAS)
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