Accelerator-Multiplier Model

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Accelerator-Multiplier Model

A model for the business cycle at the macroeconomic level. The accelerator-multiplier model is cyclical and has three phases. First, the government increases its expenditures, which increases consumer income. The increase in income leads consumers to buy more goods and services, which increases economic output. The higher output leads to higher investment in the economy. As the name implies, it combines the Keynesian multiplier model with the accelerator model.
References in periodicals archive ?
Samuelson introduced the multiplier-accelerator model of business cycles, and many studies followed to provide improved version (Samuelson, 1939; Puu et al.
2005) 'A Hicksian Multiplier-Accelerator Model with Floor Determined by Capital Stock', Journal of Economic Behavior & Organization, 56, pp.
Following the paper of Karpetis and Varelas (2005), a discrete Keynesian type multiplier-accelerator model is developed that describes a closed economy in which cycles are generated solely by the demand side of the economy as a result of prices' rigidity.
1) is identical to the one specified in the context of Samuelson's (1939) multiplier-accelerator model.
Years ago this issue was addressed, with perhaps the most comprehensive theoretical analysis being Paul Samuelson's multiplier-accelerator model.