By Claude Gnos, Louis-Philippe Rochon
The multiplier is a significant idea in Keynesian and post-Keynesian economics. it truly is principally what justifies activist full-employment economic coverage: a rise in economic expenses contributing to a number of rounds of spending, thereby financing itself. but, whereas a copingstone of post-Keynesian idea, it isn't universally approved by means of all post-Keynesians, for purposes enormously various than the mainstream.
This booklet explores either the professionals and cons of the multiplier from a strictly post-Keynesian – and Kaleckian – approach. Anchored in the culture of endogenous funds, this booklet deals a full of life dialogue from a few famous post-Keynesians from quite a few views: heritage of idea, conception and fiscal policy. The e-book begins by way of analysing the old foundations of the Keynesian Multiplier and it’s therapy in the course of the historical past of financial notion. relocating via a serious debate concerning the limits of the multiplier, the contributions end by way of delivering leading edge new perspectives in this attention-grabbing concept.
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Additional info for The Keynesian Multiplier (Routledge Frontiers of Political Economy)
96), it is convenient to concentrate on those parts of gross income for which this ‘law’ can possibly hold – and these constitute net income respectively net value added (cf. 1 and that of Marx. 8, and that is the value I am going to use. 1 it is assumed that the rate of surplus value is unity in both departments. 1 Marx–Keynes reproduction scheme – completely successful reproduction. 20 Hartwig (v) and of surplus value (s) are equal in each department. What the entrepreneurs (E) spend as variable capital, constitutes income for the workers (W).
31–7. Keynes, J. M. (1972), ‘The Means to Prosperity’, in The Collected Writings of John Maynard Keynes, Vol. 9: Essays in Persuasion, London: Cambridge University Press, pp. 335–66. Keynes, J. M. (1973a), The General Theory of Employment, Interest, and Money, reprint, London: Macmillan. Keynes, J. M. (1973b), ‘An Economic Analysis of Unemployment’, in The Collected Writings of John Maynard Keynes, Vol. 13: The General Theory and After. 343–67. Keynes, J. M. (1973c), The General Theory of Employment, in The Collected Writings of John Maynard Keynes, Vol.
But this is not my main criticism of the traditional interpretation of the multiplier. What seems to be more damaging to the presentation of the multiplier process à la Meade or Keynes is that it seems to constitute a grossly false abstraction from economic reality. A theoretical concept must be regarded as ‘unrealistic’ if it ‘does not refer to anything actual’ (Mäki, 1998, p. 410). Almost thirty years ago, the German socio-economist Werner Hofmann levelled the critique that the view of the multiplier process presented above would establish a ‘disjunction and independence of aspects of the economic process which belong together’ (Hofmann 1979, p.