The Paradox of Thrift and Crowding-In of Private Investment in a Simple IS-LM Model Deepankar

Abstract

This paper derives conditions for two key Keynesian propositions in a simple IS-LM model: (a) the paradox of thrift, and (b) the crowding-in of private investment expenditures by government expenditures. A linear specification of the model is then presented as a special case that can be used for empirical analysis. Using data for the US economy for the… (More)

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