Perfect Competition and the Keynesian Cross:Revisiting Tobin

Partha Sen
Additional contact information
Partha Sen: Delhi School of Economics

No 135, Working papers from Centre for Development Economics, Delhi School of Economics

Abstract: I look at an exogenous decrease in the desire to save in a two-sector-two-period overlapping generations model, where the consumption good is capital-intensive and the elasticities of substitution in production are "small". It is shown that there is a Keynesian-type multiplier at work, even though the model is a competitive one with full employment (and inelastic labour supply). It is reminiscent of Tobin (1975) who had shown thirty years ago that Keynesian results could be obtained with (short run) Marshallian dynamics (albeit in an ad-hoc model).

Keywords: Overlapping Generations; Two-sector Models; Multiplier; Keynesian Cross. (search for similar items in EconPapers)
JEL-codes: D90 E12 O41 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2005-05
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.cdedse.org/pdf/work135.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cde:cdewps:135

Ordering information: This working paper can be ordered from
http://www.cdedse.org/

The price is free.

Access Statistics for this paper

More papers in Working papers from Centre for Development Economics, Delhi School of Economics Delhi 110 007. Contact information at EDIRC.
Bibliographic data for series maintained by Sanjeev Sharma ().