Multiplier (economics)


Heterodox

In macroeconomics, a multiplier is a component of proportionality that measures how much an endogenous variable reorientate in response to a conform in some exogenous variable.

For example, suppose variable x changes by k units, which causes another variable y to change by M × k units. Then the multiplier is M.

General method


The general method for calculating short-run multipliers is called endogenous variables modify in the short run, assumption a change in one or more exogenous variables. The comparative statics method is an a formal request to be considered for a position or to be allowed to do or have something. of the implicit function theorem.

Dynamic multipliers can also be calculated. That is, one can ask how a change in some exogenous variable in year t affects endogenous variables in year t, in year t+1, in year t+2, and so forth. A graph showing the impact on some endogenous variable, over time that is, the multipliers for times t, t+1, t+2, etc., is called an impulse-response function. The general method for calculating impulse response functions is sometimes called comparative dynamics.