John Maurice Clark's Contribution to the Genesis of the Multiplier Analysis

John Maurice Clark is commonly recognized as one of the most influential figures in US interwar economic thinking. This note focuses on a specific aspect of Clark's work which epitomizes his attempt to combine the rigor of traditional economic analysis with his "institutionalist" attitude, namely his contribution to the multiplier principle. First we will discuss Clark's independent discovery of the multiplier principle - by which it is meant the familiar notion that an initial increase (or decrease) in expenditures has a multiple effect on total expenditures - also providing in the appendix some unpublished evidence which seems to confirm that Clark arrived at it before reading Kahn's celebrated 1931 article, "The Relation of Home Investment to Unemployment." Then, we will dwell into some more analytical aspects of Clark's treatment of the multiplier, focusing, in particular, on his attempt to reconcile the traditional "Kahn-Keynes" approach with the so called "velocity of circulation" approach