Time variation in the size of the multiplier: a Kalecki–Harrod approach

Setterfield, Mark

doi:10.4337/roke.2019.01.03

Cited by 3 publications

(1 citation statement)

References 29 publications

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“…Indeed, such crowding-in of private investment may be a strong-enough channel to justify the observed doubling of the multiplier. Unfortunately, Setterfield (2019) does not provide a calibration to judge on the size of the effect. 11 Bachmann/Sims (2012) find evidence for a reinforced confidence channel giving rise to an inflated multiplier effect of this range, yet they do not analyze whether the channel works through induced private investment.…”

Section: The Macro Stylized Factsmentioning

confidence: 99%

Fiscal policy: post- or New Keynesian?

Gechert

2023

European Journal of Economics and Economic Policies Intervention

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This paper asks whether the post-Keynesian or New Keynesian paradigm provides a more realistic description of the effects of fiscal policy on output and consumption. I establish some macro and microeconomic stylized facts on fiscal multipliers and marginal propensities to consume based on the extensive empirical literature. I compare them to basic and extended modelling approaches within the two traditions. The picture is mixed and points to shortcomings in both paradigms. I outline the elements they could learn from each other as well as from some other strands in the literature to create a coherent and convincing Keynesian macro-micro framework of fiscal policy modelling.

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Section: The Macro Stylized Factsmentioning

confidence: 99%

Fiscal policy: post- or New Keynesian?

Gechert

2023

European Journal of Economics and Economic Policies Intervention

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Approaching Budget Deficits, Debts and Money in a Socially Responsible Manner

Sawyer

2019

Frontiers of Heterodox Macroeconomics

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Government can always finance its expenditure with the co-operation of the central bank. Key issue should be the desirability of proposed expenditure, resource and funding implications. It is argued that 'people's quantitative easing' does not contribute beyond what traditional fiscal policy could achieve. The 'golden rule' whereby borrowing is permissible for public investment is critiqued. It is argued that the target budget deficit should be set to secure macroeconomic objectives and focus on 'full employment', noting the difficulties of defining full employment and capacity. The budget constraint coming from full employment is set out. The structural budget balance alternative is critiqued and argued to be in general infeasible. The possible role of interest rates is discussed. It is then argued that a debt arising from budget deficit along the lines indicated in this contribution is sustainable. It is argued that governments should operate where there is no fiscal space left.

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Tolerable ranges of variation in the rate of capacity utilisation and corridor instability: a reply to Florian Botte

Setterfield¹

2019

Cambridge Journal of Economics

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This reply to Botte (2019, Estimating normal rates of capacity utilization and their tolerable ranges: a comment on Mark Setterfield, Cambridge Journal of Economics, forthcoming) responds to criticisms of the methods used to estimate the normal rate of capacity utilisation and a tolerable interval of variation in the actual rate of capacity utilisation around the normal rate in Setterfield (2019a, Long-run variation in capacity utilization in the presence of a fixed normal rate, Cambridge Journal of Economics, vol. 43, no. 2, 443–63). It concludes with some further reflections on the concept of corridor instability.

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Time variation in the size of the multiplier: a Kalecki–Harrod approach

Cited by 3 publications

References 29 publications

Fiscal policy: post- or New Keynesian?

Fiscal policy: post- or New Keynesian?

Approaching Budget Deficits, Debts and Money in a Socially Responsible Manner

Tolerable ranges of variation in the rate of capacity utilisation and corridor instability: a reply to Florian Botte

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