Multipliers: A brief note on spending efficiency

Raymond Lee ()
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Raymond Lee: Benedict College

Economics Bulletin, 2012, vol. 32, issue 3, 2678-2687

Abstract: This note discusses expenditure multipliers and their use in analyzing spending efficiency. Conceptual models are developed to examine the marginal propensities; namely consumption and investment and their role in influencing the expenditure multiplier, aggregate spending cycles, consumption and investment efficiencies, and aggregate income generation. Additional models are developed to examine the marginal propensities and their impact on the expenditure multiplier when the assumptions governing marginal propensity behavior are relaxed. It is suggested in this note that relaxing the assumptions governing the marginal propensities to consume and invest will alter the growth implications upon which multiplier analysis is based.

Keywords: JEL: 5; E (search for similar items in EconPapers)
JEL-codes: E2 (search for similar items in EconPapers)
Date: 2012-09-27
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Citations: View citations in EconPapers (1)

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