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We measure the size of the fiscal multiplier using a heterogeneous agents model with incomplete markets, capital and rigid prices and wages. This environment captures all elements that are considered essential for a quantitative analysis. First, output is (partially) demand determined due to pricing frictions in product and labor markets, so that a fiscal stimulus increases aggregate demand. Second, incomplete markets deliver a realistic distribution of the marginal propensity to consume across the population, whereas all households counterfactually behave according to the permanent income hypothesis if markets are complete. Here, poor households feature high MPCs and thus tend to spend a large fraction of the additional income that arises as a result of a fiscal stimulus, assigning a quantitatively important role to the standard textbook Keynesian cross logic. Interestingly, and unlike conventional wisdom would suggest, our dynamic forward looking model reinforces this channel significantly. Third, the model features a realistic wealth to income ratio since we allow two assets, government bonds and capital. We find that market incompleteness plays the key role in determining the size of the fiscal multiplier, which is about 1.5 if deficit financed and about 0.6 if tax financed. Surprisingly, the size of fiscal multiplier remains similar in the Great recession where the economy was in a liquidity trap. Finally, we elucidate the differences between our heterogeneous-agent incomplete-markets model to those featuring complete markets or hand-to-mouth consumers. ; The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.

Conventional textbook treatments of money multiplier analysis are virtually devoid of any calculations of real world money supply changes, probably because the standard monetary base multiplier requires tedious calculations and is somewhat difficult to interpret. The purpose of this paper is to present a new money multiplier which is easily calculable in first differences. Applications of this new multiplier are investigated using case studies of money supply change in two periods: the Great Depression (1929–1933), and during the slow monetary growth of the early nineties (1991–1994).

Every government that controls an exhaustible resource must decide whether to exploit it or to conserve and thereby let the subsequent government decide whether to exploit or conserve. This paper develops a theory of this situation and shows when a small probability that some future government will exploit a resource leads to a domino effect with rapid exploitation. This effect leads to a multiplier that measures how a small change in parameters can have large effects. The multiplier is especially large if the government is powerful now but unlikely to be in power later. The multiplier also permits dramatic returns on lobby contributions contingent on exploitation -- or on compensations contingent on conservation -- when these offers are expected to continue. To best take advantage of the multiplier, I show how and when compensations should be offered to the president, the party in power, the general public, or to the lobby group.

ABSTRACT: The currently ongoing COVID-19 crisis has challenged healthcare around the world. The call for global solutions in international healthcare pandemic outbreak monitoring and crisis risk management has reached unprecedented momentum. The novel coronavirus SARS-CoV-2 imposes the most unexpected external economic shock to modern humankind, triggering abrupt consumption and behavior pattern shifts around the world with widespread socio-economic impacts. In order to alleviate unexpected negative fallouts from the crisis, governments around the world have incepted the largest ever amount of strategic economic bailout rescue and recovery packages that particularly focus on economic and social targets. The potential focus of bailouts and recovery ranges from urban-local and national to even global and future-oriented beneficiaries, as pursued in public investments on climate stabilization in the United States Green New Deal or the European Green Deal Sustainable Finance Taxonomy. Large-scale and future-oriented governmental investments are valuable macroeconomic multipliers that can benefit society as a whole in the short run and long term. Economic multipliers trickle down positively in society since governmental spending incepting projects leads to increased salaries, opportunities to support a family and employ other people in the consumption of goods and services, to name a few economic multiplying growth opportunities in the wake of governmental spending. This paper proposes the idea that multiplier effects may vary based on the causes that receive governmental funding. Evidence of country differences in multiplier effectiveness already exist. Multipliers also appear to trickle down in society with a certain time lag. Lastly, multiplier effects can also be negative if the government chooses to cut spending during austerity measures. The discussion proposes potential future hypothesis testing opportunities for investigating healthcare dependent multipliers. Given the enormous amount of governmental COVID ...

Abstract. This paper revisits the standard multiplier-accelerator model, as advanced by Samuelson. While borrowing on the main assumptions of the multiplier-accelerator, we check the validity of Keynesian theory. Using higher-order difference equations and advanced-level mathematical techniques we solve the tax-augmented multiplier-accelerator model, as well as the open economy one. We find that the values of equilibrium national income are identical to the simple national-income model in the absence of the accelerator. We solve the simple multiplier-accelerator model both in present terms and withprolonged consumption. We solve for equilibrium consumption, tax, and imports which are unaffected by the accelerator. All results conform to Keynesian theory where investment, government spending and exports have a favorable multiplying effect on national income through their respective multipliers. The accelerator coefficient affects neither those multipliers, nor the income and the non-income tax multipliers. Expanding the multiplier-accelerator by the volume of foreign trade, taxation or both does not change the values of Keynesian variables. Adding an accelerator leaves optimal values unaffected but, more importantly, reinforces Keynesian theory.Keywords. Multiplier, Accelerator, Open economy, Difference equations, Keynesian national-income model, Tax multiplier, Exports multiplier.JEL. E12, C02, E21, E22.

Though the sums obtained by social security fraud in GB are minimal, an army of fraud investigators has continued to expand. The fraud investigation divisions of the Depts of Employment & Social Security are described, & fault is found with the formula that they use to justify their existence in terms of the amount of money they regularly save the nation -- the "weekly benefit saving." It is argued that these figures reflect the activities of honest rather than dishonest claimants, & that the real fraud lies in the continuation of funding for these snoopers. 1 Illustration. K. Hyatt