Source: EconLog
by Jon Murphy
“Under the Keynesian model, a given increase in income will mechanically generate a given increase in consumption, and thus national output. Readers with a background in economics will recognize this as the Keynesian multiplier. But what Hall showed, building off Friedman, is that such a mechanical relationship is conditional, at best. Whether the change in income was anticipated or unexpected, permanent or temporary, will influence how effective the policy will be.” (10/14/26)
https://www.econlib.org/econlog/a-nobel-for-microfoundations