JOHN MAURICE CLARK AND THE MULTIPLIER: A NOTE

Abstract

According to Clark (1935a, b), if the various studies on the secondary effects of public works expenditures are examined, two main approaches to the analysis of the problem are revealed: “one via successive cycles of income and spending by ultimate recipients of income” – which the Columbia economist termed the “Kahn-Keynes” approach – “the other via the volume of money and its velocity of circulation.” As is well known, in the first approach, business fluctuations are seen primarily as a consequence of fluctuations in current investment. Accordingly, the amount of the secondary effects is determined by: (a) the amount of the net increase in investment; (b) the marginal propensity to consume; and (c) the length of the income propagation period. As it appears from the above, in the “Kahn-Keynes” analysis of the secondary expansion, money plays only a passive role.

Citation

Fiorito, L. (2004), "JOHN MAURICE CLARK AND THE MULTIPLIER: A NOTE", Samuels, W.J. (Ed.) A Research Annual (Research in the History of Economic Thought and Methodology, Vol. 22 Part 1), Emerald Group Publishing Limited, Bingley, pp. 161-172. https://doi.org/10.1016/S0743-4154(03)22006-X

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