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The finance-investment and saving-funding circuit in the closed and open economies with government

Author

Listed:
  • Philip Arestis
  • Marco Flávio Cunha Resende
  • Douglas Alcântara Alencar
  • Lúcio Otávio Seixas Barbosa
  • Gustavo Figueiredo Campolina Diniz

Abstract

This contribution discusses the Finance-Investment and Saving-Funding (FISF) circuit regarding the closed and open economies with government. Moreover, we discuss the fiscal policy effects on aggregate demand and income in the FISF circuit context. Keynes explained the FISF circuit assuming a closed economy without government. The novelty of the current contribution is to analyze the abovementioned circuit in the closed and open economy context including government. We show that the basic features of the FISF circuit remain unchanged for the closed and open economies when government is considered in the circuit.

Suggested Citation

  • Philip Arestis & Marco Flávio Cunha Resende & Douglas Alcântara Alencar & Lúcio Otávio Seixas Barbosa & Gustavo Figueiredo Campolina Diniz, 2017. "The finance-investment and saving-funding circuit in the closed and open economies with government," International Review of Applied Economics, Taylor & Francis Journals, vol. 31(6), pages 832-845, November.
    • Handle: RePEc:taf:irapec:v:31:y:2017:i:6:p:832-845
    DOI: 10.1080/02692171.2017.1324411
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    References listed on IDEAS

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    1. L. Randall Wray, 1998. "Understanding Modern Money," Books, Edward Elgar Publishing, number 1668.
    2. Fernando J. Cardim de Carvalho, 1992. "Mr Keynes And The Post Keynesians," Books, Edward Elgar Publishing, number 79.
    3. Louis-Philippe Rochon & Sergio Rossi (ed.), 2003. "Modern Theories of Money," Books, Edward Elgar Publishing, number 2506.
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