We develop a Keynesian cross analysis with a dynamic optimization setting that explains long-run stagnation caused by … aggregate demand deficiency. We show that an increase in government purchases boosts GDP through a multiplier process, but the … through moderation of deflation. Thus, countries that have lapsed into long-run stagnation should expand government spending …

We propose a microeconomic foundation of the multiplier effect and that of the consumption function using a dynamic … demand through a multiplier-like process but that the implication is quite different. It works through not an increase in …

We propose a microeconomic foundation of the multiplier effect and that of the consumption function using a dynamic … demand through a multiplier-like process but that the implication is quite different. It works through not an increase in … consumption function ; multiplier effect ; Keynesian Cross ; persistent unemployment ; aggregate demand …