The Keynesian Multiplier Effect Reconsidered

The Keynesian Multiplier Effect Reconsidered

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 alth...

The Microfoundations of the Keynesian Multiplier Process

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. * The author acknowledges comments from Alberto Alonso and financial supp...

The Anrep effect reconsidered.

Evidence is presented supporting the hypothesis that the positive inotropic effect after an abrupt increase in systolic pressure (Anrep effect) is the recovery from subendocardial ischemia induced by the increase and subsequently corrected by vascular autoregulation of the coronary bed. Major evidence consists of data obtained from an isolated heart preparation showing that the Anrep effect can...

The Matthew effect in economics reconsidered