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| Luis Carlos Corchón |
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| ''The Keynesian multiplier and the Pigou effect under substitution between private and public consumption'' |
| ( 2010, Vol. 30 No.1 ) |
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| 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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| Keywords: Keynes, Multiplier, Unemployment, Pigou |
JEL: E1 - General Aggregative Models: General
J2 - Demand and Supply of Labor: General |
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| Manuscript Received : Sep 14 2009 | | Manuscript Accepted : Mar 25 2010 |
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