Note about the concept of ‘Net Multipliers'

Louis de Mesnard

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Abstract: Net multipliers, as introduced by Oosterhaven and Stelder (2002) accept outputs as entries instead of final demand. They are found by multiplying ordinary multipliers by the final demand ratio over the sector's output. This pragmatic solution suffers from ratio instability over time. The alternative net multipliers proposed here are based on the interpretation of the Leontief inverse matrix for the effects generated at each round. The new solution is not sensitive to the size of impacts. Now net multiplier is equal to the corresponding ordinary multiplier minus one, and the ordering of multipliers is unchanged.

Keywords: demand (economic theory); input-output analysis; multiplier (economics) (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (5)

Published in Journal of Regional Science, 2002, 42 (3), pp.545-548

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