Profits and GDP in the basic model

In the basic model it is assumed that the economy is closed and there is no government. In this situation, with two sectors producing respectively investment and consumption goods, total output and employment are determined by investment through the Keynesian investment multiplier. This result obtains because the capitalist economy is demand-constrained. By contrast, the centrally planned socialist economies were supply-constrained. In the capitalist economy the multiplier process ensures that investment finances itself through providing exactly the same amount of saving as investment in any given period. However, the condition for the stability of this result is the rise in wages with labor productivity.

Macroeconomic impact of remittances on output growth: Evidence from Turkey

This study estimates a Keynesian simultaneous, dynamic macro-econometric model to investigate the impact of remittances on key macro variables such as consumption, investment, imports and income in Turkey. The estimated impact and dynamic multipliers indicate that impact of remittances on consumption, imports and income are all positive and reduce gradually while that on investment wears out in the second year. The impact multiplier for income implies a substantial increase in income due to remittances through the multiplier process. The remittances-induced output growth rate is highest during the early 1970s and the early 1980s, but negligible during the other years.

Stability Of Money Multipliers: Evidence From Turkey

This paper investigates whether the money multiplier process in the Turkish economy is stable and can be forecasted. Research results show that the processes which convert the base money supply into the final monetary aggregates are unstable and decrease the effectiveness of monetary policies pursued by the CBRT. In addition, the sub-components of the money multiplier do not support a stable money multiplier process, indicating that traditional monetarist prescriptions for the conduct of economic policy are not appropriate for the Turkish economy.

The Importance of the First round in the Multiplier Process: The Impact of Civil Service Dispersal

In this paper an extended Keynesian regional multiplier model is developed and used to estimate the local impact of two proposed (but subsequently cancelled) moves in the UK programme of Government office dispersal. These moves were to have been the relocation of the Property Services Agency to Cleveland and part of the Ministry of Defence to the county of South Glamorgan. The multiplier formulation explicitly takes into account an important feature of Government office dispersal; that is, that a large proportion of the employees move with the job. The importance of the first round in the multiplier process is stressed, and quantitative estimates of the effects of varying the nature of the initial injection are given.