Marginal Propensity to Consume 08: The Eternality of “Secular Stagnation”
In the year 2525 in the two “autonomous” cities of Anglo-America, everywhere endogenous was everything except for the public spending ( G in macroeconomics), the communal investment ( I ), and the MPC ( ΔC/ ΔY ). Once upon a time in the South, on the other Earthly side, there were so many “commonwealths” where everything but the government and fiscal dis-spending ( ----- G ) was endogenous. To begin, we vary a couple of definitions. First, Y= C+ I + G , all in “nominal.” Second, there are two kinds of constancy, that is, “fixed” yet discretional and everywhere “constant.” A Downturn and Fiscal Policy . When the GDP ( Y ) was expected to go on as ordinary (in the year 2525), the fiscal outlays ( G ) were constant, or “fixed” as often assumed “for the sake of simplicity.” The GDI ( I in macroeconomics) was “fixed.” The MPC, defined as the cross-scenario gap in consumption vis-à-vis the gap in GDP,...