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

Jean-Pascal Benassy

PSE Working Papers from HAL

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.

Keywords: IS-LM; DSGE models; Keynesian multiplier; crowding out; non-Ricardian economies; modèles dynamiques stochastiques; multiplicateur keynésien; effets d'éviction; économies non-ricardiennes (search for similar items in EconPapers)
Date: 2006-02
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00590513v1
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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 mutiplier: A dynamic general equilibrium model (2007)
Working Paper: IS-LM and the multiplier: A dynamic general equilibrium model (2006)
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