A few things you always wanted to know about multipliers,but were afraid to ask

Ferran Sancho

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

Abstract: Policy evaluation relies on validated modelling tools. Among these, the interindustry model is one of the most widely used, primarily due to its mathematical simplicity, which facilitates the calculation of economy- wide multiplier effects resulting from policy-induced changes in final demand. However, this simplicity can lead to conceptual narrowness, potentially overlooking broader contextual factors. As Oosterhaven (2017, 2022) highlights, the issue of multipliers has two key dimensions: the numerical calculations themselves and, more importantly, the modelling assumptions underlying these calculations, as they ultimately determine the relevance and validity of policy-related results. In this text, we explore this issue by comparing the various outcomes that arise under different scenarios regulating the economy's adjustment to policy-induced changes. Our findings suggest that classical multipliers may provide a biased perspective on an economy's structural behaviour.

Pages: 11
Date: 2025-09-03
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://pareto.uab.es/wp/2025/97825.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:978.25

Access Statistics for this paper

More papers in UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) Contact information at EDIRC.
Bibliographic data for series maintained by Xavier Vila ().