A multiplier evaluation of primary factors supply–shocks

Manuel Alejandro Cardenete (), M. Carmen Lima () and Ferran Sancho
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M. Carmen Lima: Department of Economics, Quantitative Methods and Economic History, Universidad Pablo de Olavide

No 17.01, Working Papers from Universidad Pablo de Olavide, Department of Economics, Quantitative Methods and Economic History

Abstract: Demand-side multipliers have ruled within multisectoral models as the main indicators for policy effectiveness and key-sector determination. The causal link between new exogenous final demand and responded endogenous total output is well understood and has been the basis for such a prevalent demand-side analysis both in linear interindustry analysis and in non-linear applied general equilibrium models. In this paper we shift the perspective to supply-side injections and we do so by studying the repercussion effects of marshalling additional primary factors, labor and capital services, which are injected into the economy and give rise to a general resource reallocation. As a result, we obtain estimates of supply multipliers that provide complementary information to standard demand multipliers. We illustrate the methodology using an empirical general equilibrium model built with the most recent data for the region of Andalusia, Spain.

Keywords: Supply multipliers; applied general equilibrium; supply-side key sectors (search for similar items in EconPapers)
JEL-codes: C63 C68 R13 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2017-02
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http://www.upo.es/serv/bib/wphaei/haei1701.pdf First version, 2017 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pab:wphaei:17.01

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