The response of aggregate demand to income, money supply, and price level

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Abstract

The response elasticities of (nominal) aggregate demand to the price level and to other nominal variables (e.g., money supply) are both positive but smaller than one. Aggregate demand is less/as responsive to real income than/as to the price level in the short/long run. Real aggregate demand is less/as responsive to real income than/as nominal aggregate demand is to the price level in the short/long run. Some uses of these results are indicated.

Original languageEnglish
Pages (from-to)357-363
Number of pages7
JournalJournal of Macroeconomics
Volume6
Issue number3
DOIs
Publication statusPublished - 1984

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