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

Jean-Pascal Benassy

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Abstract: We construct 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. A key to this result is the conjunction of two features: price rigidities (as is usually expected), but also a non-Ricardian economy.

Keywords: IS-LM model; Dynamic stochastic general equilibrium models; Multiplier (search for similar items in EconPapers)
Date: 2007-08
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Published in Economics Letters, 2007, 96 (2), pp.189-195. ⟨10.1016/j.econlet.2006.12.028⟩

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Related works:
Journal Article: IS-LM and the multiplier: A dynamic general equilibrium model (2007)
Working Paper: IS-LM and the multiplier: A dynamic general equilibrium model (2006)
Working Paper: IS-LM and the multiplier: A dynamic general equilibrium model (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00754211

DOI: 10.1016/j.econlet.2006.12.028

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