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Heertje, Heemeijer, and Samuelson on the Origin of Samuelson's Multiplier-Accelerator Model

Heertje, Heemeijer, and Samuelson on the Origin of Samuelson's Multiplier-Accelerator Model History of Political Economy 35:2 (2003) unemployment. In order to evaluate the effects of different policies, he also discussed how the economy reacts to disturbances. His “model” might be described as a simple version of the Keynesian macroeconomics of the 1950s. More specifically, Ohlin used multiplier analysis to determine national income and the accelerator to determine investments. In the former case he started from Kahn 1931; in the latter case, probably ultimately from Clark 1917. The following passage from Ohlin’s report indicates that he verbally sensed that the interaction between the multiplier and the accelerator might produce oscillations: 1) The volume of investment is as discussed above related to the actual and calculated rate of change of production of consumption goods. 2) The latter is via the propensity to save related to total income, which is based on total production. . . . These circumstances also explain to some extent why in the absence of further disturbances an upturn of production in a normal business situation tends to continue and when the top of the business cycle has been reached after a while turns down again. (1934, 52) Some caveats are necessary. First, Ohlin did not explicitly mention http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png History of Political Economy Duke University Press

Heertje, Heemeijer, and Samuelson on the Origin of Samuelson's Multiplier-Accelerator Model

History of Political Economy , Volume 35 (2) – Jun 1, 2003

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Publisher
Duke University Press
Copyright
Copyright 2003 by Duke University Press
ISSN
0018-2702
eISSN
1527-1919
DOI
10.1215/00182702-35-2-323
Publisher site
See Article on Publisher Site

Abstract

History of Political Economy 35:2 (2003) unemployment. In order to evaluate the effects of different policies, he also discussed how the economy reacts to disturbances. His “model” might be described as a simple version of the Keynesian macroeconomics of the 1950s. More specifically, Ohlin used multiplier analysis to determine national income and the accelerator to determine investments. In the former case he started from Kahn 1931; in the latter case, probably ultimately from Clark 1917. The following passage from Ohlin’s report indicates that he verbally sensed that the interaction between the multiplier and the accelerator might produce oscillations: 1) The volume of investment is as discussed above related to the actual and calculated rate of change of production of consumption goods. 2) The latter is via the propensity to save related to total income, which is based on total production. . . . These circumstances also explain to some extent why in the absence of further disturbances an upturn of production in a normal business situation tends to continue and when the top of the business cycle has been reached after a while turns down again. (1934, 52) Some caveats are necessary. First, Ohlin did not explicitly mention

Journal

History of Political EconomyDuke University Press

Published: Jun 1, 2003

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