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Cumulative Effects of Changes in Aggregate Spending as Illustrated by Public Works
J. M. Clark
The American Economic Review
Vol. 25, No. 1 (Mar., 1935), pp. 14-20
Published by: American Economic Association
Stable URL: http://www.jstor.org/stable/1812648
Page Count: 7
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Paper presented at a joint Round Table Conference of the American Economic Association and the American Statistical Association at Chicago, Illinois, December 27, 1934. Cumulative effects of increases in aggregate spending are suggested by business cycles, and by the effects of Allied purchases in the United States in 1915-16. Indirect primary effects of construction outlays are probably about equal to direct primary effects, but some are likely to be deferred. Secondary effects are approached via the Kahn-Keynes theory of successive dwindling cycles of income and spending, and via the volume of money and its circuit velocity. The former analysis gives ground for expecting large cumulative effects within the first year, after which other factors become decisive.
The American Economic Review © 1935 American Economic Association