Abstract
What is the effect of a change in the level of investment? Wicksell (1935) was the first economist to pose this question explicitly in the context of his ‘pure credit economy’. Voluntary or anticipated saving is not a requirement if the banking system is willing to supply the necessary credit to finance an increase of investment demand. The effect of this increase of investment demand is an increase in the level of prices (if the level of output is fixed or given), or output if there is idle capacity and unemployed labour.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Hicks, J.R. 1974. The crisis in Keynesian economics. Oxford: Blackwell.
Kahn, R. 1931. The relation of home investment to unemployment. Economic Journal 41 (June): 173–198. Reprinted in R. Kahn, Selected essays on employment and growth. Cambridge: Cambridge University Press, 1972.
Kalecki, M. 1971. Selected essays on the dynamics of the capitalist economy. Cambridge: Cambridge University Press.
Keynes, J.M. 1930. A treatise on money. Vol. 1: The Pure Theory of Money. London: Macmillan.
Keynes, J.M. 1936. The general theory of employment, interest and money. London: Macmillan.
Keynes, J.M. 1973. In The collected writings of John Maynard Keynes, ed. D.E. Moggridge and E. Johnson, vol. 14. London: Macmillan for the Royal Economic Society.
Wicksell, K. 1935. Lectures in political economy. Vol. 2. London: Routledge & Kegan Paul.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Amadeo, E.J. (2018). Multiplier Analysis. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_964
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_964
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences