Keynes' Illusionary Multiplier Theory

7 Pages Posted: 25 Jun 2013 Last revised: 10 Mar 2014

See all articles by Hak Choi

Hak Choi

Chienkuo Technology University - Department of International Business; Chung-Hua Institution for Economic Research

Date Written: June 24, 2013

Abstract

Keynes uses income to derive his consumption function and spending multiplier. This paper proves that he also needs interest rate to foster a positive consumption line. However, when the majority of households are included, such positive possibility is ruled out.

Keywords: Saving, Consumption, Interest Rate

JEL Classification: D91, E21

Suggested Citation

Choi, Hak, Keynes' Illusionary Multiplier Theory (June 24, 2013). Available at SSRN: https://ssrn.com/abstract=2284095 or http://dx.doi.org/10.2139/ssrn.2284095

Hak Choi (Contact Author)

Chienkuo Technology University - Department of International Business ( email )

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Chung-Hua Institution for Economic Research ( email )

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Taipei
Taiwan

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