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Der-Lowe

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Der-Lowe

Age/Gender: 18, Male
Location: The Other City
Job: future drop-out

IN ARGENTINIAN UNIVERSITIES, ACCOUNTANCY STUDIES YOU!

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Entry #32

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Der-Lowe

The Multiplier

Posted by Der-Lowe Apr. 30, 2008 @ 8:55 PM EDT

C=Ca+cY
I = I
Y= C + I

Yo=Co+cYo+Io
Y1=Co+cY1+I1

Y1-Yo= Co-Co+cY1-cYo+I1-Io
Y1-Yo= c(Y1-Yo)+I1-Io
Y1-Yo-c(Y1-Yo) = I1+Io
(Y1-Yo) (1-c) = I1-Io
Y1-Yo = (I1-Io)* 1/(1-c)

Y = C + A
A = Y - C
A = Y - Ca - cY
A = - Ca + Y (1-c)
a= 1-c
A= -Ca + a Y

a = 1-c
k= 1/a

Y1-Yo= (I1-Io)* k

k = (Y1-Yo)/(I1-Io)

Where C is consumption, A is saving, Y is income, I investment, c the marginal propensity to consume, a the marginal propensity to save, and k the multiplier, "the impact of a 1-dollar change in exogenous expenditures on total output." (Samuelson Nordhaus "Economics" 18th edition, page 486)
Discuss.

Updated: 05/05/08 9:23 PM Log in to comment! | Share this!

The People Have Spoken

17 Comments

Apr. 30, 2008 | 9:54 PM Christopherr says:

I agree.

Apr. 30, 2008 | 10:31 PM Der-Lowe responds:

But what about G, T, X and M???
Omitting them is UNACCEPTABLE.

F

Apr. 30, 2008 | 11:15 PM Christopherr says:

I fully agree with G, T, X, and M.

May. 1, 2008 | 5:18 PM Der-Lowe responds:

You damn monetarist, you make me sick.
Omitting some variables doesn't make the whole model wrong!

May. 1, 2008 | 5:29 PM Christopherr says:

You pig, trying to pass off a work without even crediting G, T, X, and M.

May. 1, 2008 | 6:24 PM Der-Lowe responds:

I don't talk to Chicago boys.

May. 1, 2008 | 11:30 PM Christopherr says:

I don't talk to Argentinian burnouts.

May. 2, 2008 | 7:05 AM Der-Lowe responds:

But... I love you! =(

May. 2, 2008 | 5:01 PM LaLupin says:

Don't really get it, but the again I don't study accountancy.
It just looks like very complicated algebra to me.

May. 2, 2008 | 9:08 PM Der-Lowe responds:

Nah, it's simple math.
The function is merely lineal.

May. 2, 2008 | 6:56 PM reviewer-general says:

Commie.

May. 2, 2008 | 9:09 PM Der-Lowe responds:

lol.

May. 3, 2008 | 4:07 PM reviewer-general says:

How could you forget that:

A = Pe^(rt)

AND

A = P(1 + r/n)^(rn) ???

May. 3, 2008 | 9:34 PM Der-Lowe responds:

No.

May. 3, 2008 | 10:24 PM reviewer-general says:

Why not?

May. 4, 2008 | 1:00 PM Der-Lowe responds:

Because this in not Financial math.
THIS IS MACROECONOMIIIIIIIIIIICS

May. 4, 2008 | 1:59 PM reviewer-general says:

Aha.

May. 4, 2008 | 3:40 PM Der-Lowe responds:

Indeed.
Anyway the symbols you use are funneh.
A is teh lulz.

May. 6, 2008 | 7:34 PM DarkWizard1992 says:

Puta economia y contabilidad. Awante Keynes! Muerte al Mercantilismo!

...

pero ya se murió...

FIESTAAAAAAAAAAAA!

May. 7, 2008 | 7:06 PM Der-Lowe responds:

Mercantilism is still alive.

May. 12, 2008 | 6:33 AM darknessdweller says:

darknessdweller wuz here.

May. 13, 2008 | 9:18 AM Der-Lowe responds:

spam

May. 13, 2008 | 8:12 AM ThePretenders says:

The multiplier effect is gay because I'm learning it now.

May. 13, 2008 | 9:18 AM Der-Lowe responds:

But it's fun!
=(

May. 13, 2008 | 4:51 PM n64kid says:

Quite a few things are subject to the multiplier. It's the central banks that control the power! Eat reserve ratios and creation of money through lending. EAT IT.

May. 13, 2008 | 7:24 PM Der-Lowe responds:

Monetarists are ghey. Especially the baldie, frewdman or sth like that. Ah, it was Freud, I think. He invented mind-reading as well as banks.

May. 14, 2008 | 5:45 PM ThePretenders says:

Oh shit, I had the multiplier in my mock test and I fucked up on it and threw away an A grade. My real test is 3 weeks away. Gotta revise the multiplier.

May. 14, 2008 | 7:41 PM Der-Lowe responds:

Mock tests are fun.
Are they relevant, or they're just for training?

May. 15, 2008 | 11:16 AM ThePretenders says:

Mock tests are for training and I missed one mark from an A grade. I'm learning monetary policy now.

May. 15, 2008 | 7:07 PM Der-Lowe responds:

I've already learned that; we're onto Payment Balance.
What bibliography do you have?

May. 16, 2008 | 1:12 PM Piromano says:

Ehhh.... WHAT????

May. 16, 2008 | 5:20 PM Der-Lowe responds:

ahora cambio el blag....

May. 19, 2008 | 11:18 AM ThePretenders says:

I have an Economics 4th Edition book by Alan Anderton ISBN-13: 978-1902796925. You're doing balance of payments? I have just finished that and all I have to revise for the exam is the current account. The rest is pretty irrevelant.

May. 19, 2008 | 7:59 PM Der-Lowe responds:

I use an Argentinian book, written by Victor A Becker ISBN 84-481-1973-8
We've studied that, we're onto currency markets.
I also have parallel classes with another professor about the Argentinian Economic structure, "Capitalismo Argentino" by Aldo Ferrer, and lots of moarz bibliography; I'm stressed :(

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