IDEAS home Printed from
   My bibliography  Save this paper

The Intertemporal Keynesian Cross


  • Adrien Auclert


  • Ludwig Straub


  • Matthew Rognlie

    (Northwestern University)


We demonstrate the importance of intertemporal marginal propensities to consume (IMPCs) in the transmission mechanism of macroeconomic shocks. We show that IMPCs are sufficient statistics for propagation, amplification, and the determinacy of general equilibrium outcomes. Incomplete markets models with precautionary savings and borrowing constraints capture the shape of IMPCs in the data, while alternative models with complete markets, overlapping generations, or hand to mouth agents cannot. Calibrating our model to existing evidence on IMPCs, we find that Taylor rules can ensure determinacy with a coefficient on inflation moderately less than 1, and that policies that frontload spending, such as tax cuts and deficit-financed government expenditure increases, have powerful multiplier effects.

Suggested Citation

  • Adrien Auclert & Ludwig Straub & Matthew Rognlie, 2018. "The Intertemporal Keynesian Cross," 2018 Meeting Papers 999, Society for Economic Dynamics.
  • Handle: RePEc:red:sed018:999

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    More about this item

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:red:sed018:999. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Zimmermann (email available below). General contact details of provider: .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.