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A Network-Based Algorithm For Computing Keynesian Income Multipliers In Multiregional Systems

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  • Dimitrios TSIOTAS

    (Assistant Professor, Department of Regional and Economic Development, School of Applied Economic and Social Sciences, Agricultural University of Athens, Amfissa 33100, Greece)

Abstract

In the context of the Keynesian “multiplier effect” approach, regional economic growth and development are conceived as the result of changes in demand stimulating an iterative process of returns of income. Aiming to revisit this established regional economic model, promote multidisciplinary thinking, enjoy better supervision of computations and intuitive interpretation of the results, broaden the applicability of the model, and serve educational purposes in regional economics and development, this paper proposes an algorithm for computing Keynesian income multipliers in multiregional systems. Building on network connectivity, estimations of the regional shares of imports, marginal propensity to consume, and changes in demand, the proposed algorithm provides a framework for standardizing computations of the multiplier effect in multiregional systems. The algorithm is implemented in two theoretical scenarios, contributing to a deeper conceptualization of the computation of the Keynesian income multipliers, and an empirical case of the land interregional commuting network in Greece, providing insights into the developmental dynamics of the labor market (demand for employment) in Greece. Overall, the analysis highlights the symbiotic relationship between the multiplier effect and network structure in regional markets, promotes multidisciplinary thinking in regional science and economics, and provides a code of this network-based algorithm to motivate further research.

Suggested Citation

  • Dimitrios TSIOTAS, 2022. "A Network-Based Algorithm For Computing Keynesian Income Multipliers In Multiregional Systems," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 25-46, June.
    • Handle: RePEc:hrs:journl:v:xiv:y:2022:i:2:p:25-46
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    References listed on IDEAS

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    Cited by:

    1. Thomai TASOPOULOU & Dimitrios TSIOTAS & Serafeim POLYZOS, 2023. "Investigating The Interaction Between The Topology Of Bus Transport Networks And Regional Development In Greece," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 25-46, June.
    2. Evagelia Koutridi & Dimitrios Tsiotas & Olga Christopoulou, 2023. "Examining the Spatial Effect of “Smartness” on the Relationship between Agriculture and Regional Development: The Case of Greece," Land, MDPI, vol. 12(3), pages 1-22, February.

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    More about this item

    Keywords

    regional markets; multiplier effect; export-base model; demand for employment; interregional commuting;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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