IS-LM and the multiplier: A dynamic general equilibrium model

We construct in this paper a dynamic general equilibrium model which displays the central features of the IS-LM model, and notably an income multiplier greater than one, so that crowding out does not occur. It appears that the key to this result is the conjunction of two features of our model: price rigidities (as is usually expected), but also a non-Ricardian economy.

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Year of publication:	2006-02
Authors:	Bénassy, Jean-Pascal
Institutions:	HAL
Subject:	IS-LM \| DSGE models \| Keynesian multiplier \| crowding out \| non-Ricardian economies

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00590513
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010930233