The Keynesian multiplier and the Pigou effect under substitution between private and public consumption

In this paper we present a fixprice model in which private and public consumption show some degree of substitution. We offer formulae for the Keynesian multiplier which depend on this degree of substitution. We also show that there is a Pigou effect and that, sometimes, this effect is larger than the Keynesian multiplier.

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Year of publication:	2009-04-21
Authors:	Corchon, Luis
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	Disequilibrium Multiplier Pigou Effect

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Extent:	application/pdf
Series:	MPRA Paper.
Type of publication:	Book / Working Paper
Classification:	E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation ; E12 - Keynes; Keynesian; Post-Keynesian
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008533562