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

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Type of publication:	Book / Working Paper
Language:	English
Notes:	Corchon, Luis (2009): The Keynesian multiplier and the Pigou effect under substitution between private and public consumption.
Classification:	E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation ; E12 - Keynes; Keynesian; Post-Keynesian
Source:	BASE

Persistent link: https://www.econbiz.de/10015219147