Keynes, Bastiat and the Multiplier

11 Pages Posted: 12 May 2014 Last revised: 21 May 2014

See all articles by Robert W. McGee

Robert W. McGee

Fayetteville State University - Department of Accounting

Date Written: May 12, 2014

Abstract

Keynes is back. President Obama’s economic stimulus package is based on the premise that we can spend our way out of recession. It is an application of the Keynesian multiplier theory, which was expounded in Keynes’ 1936 economic treatise, The General Theory of Employment, Interest and Money. Post-1936 economic history has given the multiplier theory mixed reviews, mostly because it has done a less than perfect job of explaining economic reality.

Frederic Bastiat (1801-1850) was a French economist and journalist. He discussed the multiplier theory in the 1840s, more than a generation before John Maynard Keynes (1883-1946) was born. This paper explores the similarities and differences of their two multiplier theories. A bibliography with links to other Bastiat studies is also included.

Keywords: utilitarian, ethics, rights theory, Frederic Bastiat, history of economic thought, French liberal, Broken Window Fallacy, justice, redistribution, rent seeking, Keynes, multiplier, theory of government, plunder, protectionism, trade, opportunity cost, bailouts, public works

JEL Classification: B1,B12,B13,B22,B25,B31,B53,D63,D72,E12,E13,E21,E24,E51,F1,F13,H1,H2,H23,H81,K11,O24,P16,P14

Suggested Citation

McGee, Robert W., Keynes, Bastiat and the Multiplier (May 12, 2014). Available at SSRN: https://ssrn.com/abstract=2435914 or http://dx.doi.org/10.2139/ssrn.2435914

Robert W. McGee (Contact Author)

Fayetteville State University - Department of Accounting ( email )

Fayetteville, NC 28301
United States

HOME PAGE: http://robertwmcgee.com

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