The Keynesian multiplier effect reconsidered

Arbeitspapier

The Keynesian multiplier effect is reinterpreted and several issues that may have misled assessments of the effect of fiscal spending are discussed. It is shown that even in the textbook Keynesian framework some transfer policy 'reduces' aggregate demand and that public works spending may completely crowd out private consumption. Useless public works are found to be equivalent to transfers although they increase accounting national income more than transfers do. The net effect of fiscal spending on national benefits is explored and shown to equal only the direct benefit created by the spending.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ISER Discussion Paper ; No. 730

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: Keynes; Keynesian; Post-Keynesian ; Fiscal Policy ; Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
• Subject: the multiplier effect ; public works ; unemployment benefits ; national income accounting ; Multiplikator ; Keynesianismus ; Öffentlicher Bauauftrag ; Öffentliche Sozialleistungen ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ono, Yoshiyasu
• Event: Veröffentlichung
• (who): Osaka University, Institute of Social and Economic Research (ISER)
• (where): Osaka
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/92811
• Last update: 10.03.2025, 11:45 AM CET