1. A NEGATIVE VIEW OF THE NEGATIVE MONEY MULTIPLIER: COMMENT.
- Author
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AUERBACH, ROBERT D. and RUTNER, JACK L.
- Subjects
BUDGET process ,MONETARY policy ,OPEN market operations ,MONETARY theory ,PUBLIC spending ,ACCOUNTS receivable ,ACADEMIC debating ,ECONOMIC models ,ECONOMIC equilibrium ,INTEREST rates - Abstract
In a recent issue of this Journal, Frank Steindl (1974), drawing on his previous article in the Journal of Political Economy (Steindl, 1971) which contained a reduced form of Carl Christ's "A Simple Macroeconomic Model with a Government Budget Restraint" (Christ, 1968), purported to show that the money multiplier is negative. The purpose of this paper is to show that Steindl's definition of equilibrium might be theoretically as well as empirically uninteresting, both because his model is largely vacuous and because it depends on a reaction between the economy and the government which may make his solution unachievable. [ABSTRACT FROM AUTHOR]
- Published
- 1977
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