On the Mythology of the Keynesian Multiplier

Keynes's multiplier story invites acceptance by building on the fact that people typically consume only a fraction of their income and that such purchases are incomes for sellers. By misrepresenting the classical definition of saving and the meaning of Say's Law, Keynes laid the grounds for extolling the virtues of consumption spending as determining income and employment growth. But the mythology of the multiplier story becomes clear when we ask, "From where do people find the means to purchase consumption goods, other than production?" The inadequacies of several earlier criticisms stem from their failure to focus on this fundamental point

Ask price · Consumption (sociology) · Economics · Economy · Epistemology · Keynesian economics · Meaning (existential) · Multiplier (economics) · Mythology · Neoclassical economics · Positive economics · Social science · Sociology · Theology · Economic Theory and Institutions · Economic Theory and Policy · Philosophy · Political Economy and Marxism

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