Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/181488
Authors: 
Palley, Thomas
Year of Publication: 
2018
Series/Report no.: 
FMM Working Paper 30
Abstract: 
This paper reconstructs the income - expenditure (IE) model to include a distinction between government purchases of output versus government production. The distinction has important consequences for output and employment multipliers. The paper also extends the IE model to incorporate a government job guarantee program (JGP), and the extended model illuminates the automatic stabilizer properties of a JGP. The model is then extended to include Kaleckian income distribution effects. That generates a novel Kaleckian balanced budget multiplier driven by changed composition of government spending. The paper concludes with some economic and political economy concerns about a JGP that are flagged by the model.
Subjects: 
Government spending
spending composition
balanced budget multiplier
job guarantee program
JEL: 
E10
E12
E62
Document Type: 
Working Paper
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