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 labor supply). It is reminiscent of Tobin (Am Econ Rev 65:195202, 1975) who had shown 30 years ago that Keyne-sian results could be obtained with (short run) Marshallian dynamics (albeit in an ad-hoc model).
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Sen, P. (2009). Tobin's “Keynesian Models of Recessions and Depression” Revisited. In: Kamihigashi, T., Zhao, L. (eds) International Trade and Economic Dynamics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-78676-4_29
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