We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Multiplier-accelerator models - Essay Example

Comments (0) Cite this document
Summary
It is however, also argued that the work of both the economists was actually an extension of the work done by John M Keynes and Richard Kahn.( Sørensen & Whitta-Jacobsen,…
Download full paper
GRAB THE BEST PAPER
Multiplier-accelerator models
Read TextPreview

Extract of sample
Multiplier-accelerator models

Download file to see previous pages... Keynes argued that level of output will increase due to multiplier relationship between output and autonomous consumption. (Hartley, J. et al. 1998). Change in output due to change in investment can be described in following manner:
The Accelerator model is based upon the assumption if current economic activity increases, it will allow entrepreneurs to expand productive capacity by investing into additional capital stock . The Acceleration principle also outlines that there will be an increase in the output level with the increase in investment and there will be an additional investment when output increases.
The above relationship suggests that consumption comprises of overall autonomous consumption and the propensity to consume with respect to the past income of an individual. Samuelson’s model therefore outlines different parametric conditions under which economy can move and as such economic cycles can occur. Samuelsson’s model is considered as incomplete as a theory of regular cycles because of its inability to predict regular business cycles however, it is still considered as one of the key advances in macroeconomic theory.
Lloyd Metzler’s model was based upon his famous Inventory Cycle principle and suggested that the precise inventory policy as chosen by the producers might have an impact on the economic cycles. This model outlines that the change in output is a relationship between the consumption and investment and investment comprises of the investments made in inventory considering capital stock as constant. (Sørensen, and Whitta-Jacobsen, 2010).
Hicksian Model was also another attempt to understand the business cycles and how consumption and investment actually have an impact on the income level. Hicks assumed that the consumption is the function of past income while investor attempts to maintain a stock of capital in relation with the income.
The combination of income and consumption therefore can generate oscillation in income or ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Multiplier-accelerator models Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1590417-multiplier-accelerator-models
(Multiplier-Accelerator Models Essay Example | Topics and Well Written Essays - 500 Words)
https://studentshare.org/macro-microeconomics/1590417-multiplier-accelerator-models.
“Multiplier-Accelerator Models Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.org/macro-microeconomics/1590417-multiplier-accelerator-models.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Long-run U.S. Economic Growth
An increase in economic growth is supposed to raise the average standard of living of the people. While studying economic growth theory, it is important to differentiate between short term and long term ups and downs. Potential GDP in a nation is determined by the aggregate labor, capital and technology available and is often identified as the long term growth (Taylor, 125).
20 Pages(5000 words)Essay
The money multiplier
The multiplier value 5 in this case means that this is the increase in the money supply which resulted from the increase of total number of dollars held by the people in form of their income and by the change in demand deposits in banks in form of investment.
1 Pages(250 words)Essay
The mechanism of the money multiplier
First, an overview of money measure will be put forth. Secondly, the mechanism in light of money multiplier will then be explained by use of symbols and equations to elaborate the cyclical variations in the multiplier factor.
4 Pages(1000 words)Essay
Macroeconomics Models
In diagram C we draw a 45 degree line from the origin which helps us to derive the level of investment in diagram D, Z2 represents the aggregate demand curve while Z1 represents the aggregate demand curve minus investment, and this helps us derive the national income or output level (Y).
6 Pages(1500 words)Essay
Nursing Models
The evolution of modern nursing models can be traced to the emergence of nursing as an independent field of knowledge and profession in the middle of 19th century when Florence Nightingale differentiated nursing from medicine. Nightingale's model relies exclusively upon the idea that the nurse plays decisive role in shaping the nursing environment to promote the well being of patients (Nightingale, 1859).
4 Pages(1000 words)Essay
Strategic Models
Prior to the concept of Balanced Score Card, decision makes primarily relied upon financial data to take decisions. This course of action often resulted in a myopic point of view for the managers. Unlike previous metrics driven indices that only relied upon financial data, a balanced scorecard takes into account the holistic picture of the company.
10 Pages(2500 words)Essay
Leadership models
Finally, their concentration on contemporary leadership issues and challenges will be analyzed, along with their implications for organizations today.The term 'leadership style' defines the "leadership model'. Style of leadership has been explained as how a person takes his team forward to achieve goals.
7 Pages(1750 words)Essay
QA Models
These standards include meeting customers’ quality requirements, complying with regulations and complying with regulations. This means they have to engage their minds continuously in calculative thinking. One of the ways of
2 Pages(500 words)Essay
Mental Models
In this case, this forms a good reason why people are not willing to change their assumptions in numerous circumstances. Leaders are expected to have an understanding of the ways their metal models affect people’s
1 Pages(250 words)Essay
High Powered Money Multiplier to Credit Creation
This essay analyzes that the supply of money varies inversely with the reserve ratios and currency and directly with the variation in the monetary base. High powered money consists of the assets that support multiplier expansion of money(DeFrancisci, 2008). The formula M= m + MB is used to calculate the money multiplier.
9 Pages(2250 words)Essay
Let us find you another Essay on topic Multiplier-accelerator models for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us