INTERACTIONS BETWEEN THE MULTIPLIER ANALYSIS AND THE PRINCIPLE OF ACCELERATION
Interactions between the Multiplier Analysis and the Principle of Acceleration
Author(s): Paul A. Samuelson
Reviewed work(s):
Source: The Review of Economics and Statistics, Vol. 21, No. 2 (May, 1939), pp. 75-78
Published by: The MIT Press
Stable URL: http://www.jstor.org/stable/1927758 .
Accessed: 02/03/2012 05:03
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INTERACTIONS BETWEEN THE MULTIPLIER ANALYSIS
AND THE PRINCIPLE OF ACCELERATION
FEW economists woulddeny that the "multiplier" analysis of the effects of governmental deficit spending has thrown some light upon this important problem. Nevertheless, there would seem to be some ground for the fear that this extremely simplified mechanism is in danger of hardeninginto a dogma, hindering progress and obscuring important subsidiary relations and processes. It is highly desirable, therefore, that model sequences, which operate under more general assumptions, be investigated, possibly including the conventional analysis as a special case.'
In particular, the "multiplier," using this term in its usual sense, does not pretend to give the relation between total national income induced by governmentalspending and the original amount of money spent. This is clearly seen by a simple example. In an economy (not necessarily our own) where any dollar of governmental deficit spending would result in a
Author(s): Paul A. Samuelson
Reviewed work(s):
Source: The Review of Economics and Statistics, Vol. 21, No. 2 (May, 1939), pp. 75-78
Published by: The MIT Press
Stable URL: http://www.jstor.org/stable/1927758 .
Accessed: 02/03/2012 05:03
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.
The MIT Press is collaborating with JSTOR to digitize, preserve and extend access to The Review of
Economics and Statistics.
http://www.jstor.org
INTERACTIONS BETWEEN THE MULTIPLIER ANALYSIS
AND THE PRINCIPLE OF ACCELERATION
FEW economists woulddeny that the "multiplier" analysis of the effects of governmental deficit spending has thrown some light upon this important problem. Nevertheless, there would seem to be some ground for the fear that this extremely simplified mechanism is in danger of hardeninginto a dogma, hindering progress and obscuring important subsidiary relations and processes. It is highly desirable, therefore, that model sequences, which operate under more general assumptions, be investigated, possibly including the conventional analysis as a special case.'
In particular, the "multiplier," using this term in its usual sense, does not pretend to give the relation between total national income induced by governmentalspending and the original amount of money spent. This is clearly seen by a simple example. In an economy (not necessarily our own) where any dollar of governmental deficit spending would result in a