John Maurice Clark's Contribution to the Genesis of the Multiplier Analysis

University of Siena Dept. of Econ. Working Paper No. 322

18 Pages Posted: 10 Oct 2001  

Luca Fiorito

University of Siena - Department of Economics; New School University

Abstract

John Maurice Clark is commonly recognized as one of the most influential figures in US interwar economic thinking. This note focuses on a specific aspect of Clark's work which epitomizes his attempt to combine the rigor of traditional economic analysis with his "institutionalist" attitude, namely his contribution to the multiplier principle. First we will discuss Clark's independent discovery of the multiplier principle - by which it is meant the familiar notion that an initial increase (or decrease) in expenditures has a multiple effect on total expenditures - also providing in the appendix some unpublished evidence which seems to confirm that Clark arrived at it before reading Kahn's celebrated 1931 article, "The Relation of Home Investment to Unemployment." Then, we will dwell into some more analytical aspects of Clark's treatment of the multiplier, focusing, in particular, on his attempt to reconcile the traditional "Kahn-Keynes" approach with the so called "velocity of circulation" approach.

Suggested Citation

Fiorito, Luca, John Maurice Clark's Contribution to the Genesis of the Multiplier Analysis. University of Siena Dept. of Econ. Working Paper No. 322. Available at SSRN: https://ssrn.com/abstract=286743 or http://dx.doi.org/10.2139/ssrn.286743

Luca Fiorito (Contact Author)

University of Siena - Department of Economics ( email )

Piazza S. Francesco, 7
Siena, I-53100
Italy
0577 232620 (Phone)
0577 232661 (Fax)

New School University ( email )

66 Fifth Avenue
New York, NY 10011
United States

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