Some Conceptual Difficulties Regarding 'Net' Multipliers

Ferran Sancho

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: Multipliers are routinely used for impact evaluation of private projects and public policies at the national and subnational levels. Oosterhaven and Stelder (2002) correctly pointed out the misuse of standard 'gross' multipliers and proposed the concept of 'net' multiplier as a solution to this bad practice. We prove their proposal is not well founded. We do so by showing that supporting theorems are faulty in enunciation and demonstration. The proofs are flawed due to an analytical error but the theorems themselves cannot be salvaged as generic, non-curiosum counterexamples demonstrate. We also provide a general analytical framework for multipliers and, using it, we show that standard 'gross' multipliers are all that is needed within the interindustry model since they follow the causal logic of the economic model, are well defined and independent of exogenous shocks, and are interpretable as predictors for change.

Keywords: : gross multipliers; net multipliers; interindustry accounting; interindustry models. (search for similar items in EconPapers)
JEL-codes: C67 D57 R15 (search for similar items in EconPapers)
Pages: 21
Date: 2012-09-21
New Economics Papers: this item is included in nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Some conceptual difficulties regarding ‘net’ multipliers (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:910.12

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