IS-LM and the multiplier: A dynamic general equilibrium model

Jean-Pascal Benassy ()

PSE Working Papers from PSE (Ecole normale supérieure)

Abstract: We construct in this paper a dynamic general equilibrium model which displays the central features of the IS-LM model, and notably an income multiplier greater than one, so that crowding out does not occur. It appears that the key to this result is the conjunction of two features of our model: price rigidities (as is usually expected), but also a non-Ricardian economy.

New Economics Papers: this item is included in nep-dge and nep-mac
Date: 2006
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Journal Article: IS-LM and the multiplier: A dynamic general equilibrium model (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:pse:psecon:2006-14

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