The Failure of the New Economics, 1959, Henry Hazlitt. Chapter XI “THE MULTIPLIER” 1. The Magic of It Let us try to find in plainer language what it is that Keynes is saying here. He explains on the next page: “It follows, therefore, that, if the consumption psychology of the community is such that they will choose to consume, e.g. nine-tenths of an increment of income, then the multiplier k is 10; and the total employment caused by (e.g.) increased public works will be ten times the primary employment provided by the public works themselves” (pp. 116-117).
The Fatal Flaw of the Keynesian Multiplier Theory
The Fatal Flaw of the Keynesian Multiplier…
The Fatal Flaw of the Keynesian Multiplier Theory
The Failure of the New Economics, 1959, Henry Hazlitt. Chapter XI “THE MULTIPLIER” 1. The Magic of It Let us try to find in plainer language what it is that Keynes is saying here. He explains on the next page: “It follows, therefore, that, if the consumption psychology of the community is such that they will choose to consume, e.g. nine-tenths of an increment of income, then the multiplier k is 10; and the total employment caused by (e.g.) increased public works will be ten times the primary employment provided by the public works themselves” (pp. 116-117).