Article ID Journal Published Year Pages File Type
5062413 Economics Letters 2007 7 Pages PDF
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.

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Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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IS-LM and the multiplier: A dynamic general equilibrium model
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