Arbeitspapier
A reinterpretation of the Keynesian consumption function and multiplier effect
We propose a microeconomic foundation of the multiplier effect and that of the consumption function using a dynamic optimization model that explains a shortage of aggregate demand and unemployment. We show that government purchases boost aggregate demand through a multiplier-like process but that the implication is quite different. It works through not an increase in disposable income but moderation of deflation, which makes money holding costly and stimulates consumption.
- Language
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Englisch
- Bibliographic citation
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Series: ISER Discussion Paper ; No. 779
- Classification
-
Wirtschaft
General Aggregative Models: Keynes; Keynesian; Post-Keynesian
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Fiscal Policy
- Subject
-
Keynesian consumption function
multiplier effect
Keynesian Cross
persistent unemployment
aggregate demand
Konsumtheorie
Keynesianismus
Multiplikator
Langzeitarbeitslosigkeit
Gesamtwirtschaftliche Nachfrage
Theorie
- Event
-
Geistige Schöpfung
- (who)
-
Murota, Ryu-ichiro
Ono, Yoshiyasu
- Event
-
Veröffentlichung
- (who)
-
Osaka University, Institute of Social and Economic Research (ISER)
- (where)
-
Osaka
- (when)
-
2010
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Murota, Ryu-ichiro
- Ono, Yoshiyasu
- Osaka University, Institute of Social and Economic Research (ISER)
Time of origin
- 2010
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Fallacy of the multiplier effect: Correcting the income analysis
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