Ricardian equivalence and the intertemporal Keynesian multiplier

Jean-Pascal Bénassy (1, 2)

1 PJSE - Paris-Jourdan Sciences Economiques
2 CEPREMAP - Centre pour la recherche économique et ses applications

We show that Keynesian multiplier effects can be obtained in dynamic optimizing models if one combines both price rigidities and a "non-Ricardian" framework where, due for example to the birth of new agents, Ricardian equivalence does not hold.

Keywords: Multiplier; Ricardian equivalence; Non-Ricardian economies; Price rigidities; Keynesian multiplier

Domains: Economics and Finance

Jean-Pascal Bénassy. Ricardian equivalence and the intertemporal Keynesian multiplier. Economics Letters, 2007, 94 (1), pp.118-123. ⟨10.1016/j.econlet.2006.08.010⟩. ⟨halshs-00754250⟩