Some conceptual difficulties regarding ‘net’ multipliers
AbstractMultipliers are routinely used for impact evaluation of private projects and public policies at the national and subnational levels. Oosterhaven and Stelder (J Reg Sci 42(3), 533–543, 2002 ) correctly pointed out the misuse of standard ‘gross’ multipliers and proposed the concept of ‘net’ multiplier as a solution to this bad practice. We prove their proposal is not well founded. We do so by showing that supporting theorems are faulty in enunciation and demonstration. The proofs are flawed due to an analytical error, but the theorems themselves cannot be salvaged as generic, non-curiosum counterexamples demonstrate. We also provide a general analytical framework for multipliers and, using it, we show that standard ‘gross’ multipliers are all that are needed within the interindustry model since they follow the causal logic of the economic model, are well-defined and independent of exogenous shocks, and are interpretable as predictors for change. Copyright Springer-Verlag Berlin Heidelberg 2013
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Bibliographic InfoArticle provided by Springer in its journal The Annals of Regional Science.
Volume (Year): 51 (2013)
Issue (Month): 2 (October)
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Other versions of this item:
- Ferran Sancho, 2012. "Some Conceptual Difficulties Regarding 'Net' Multipliers," UFAE and IAE Working Papers 910.12, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
- D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
- R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
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- Ferran Sancho, 2011.
"Straightening out the concept of direct and indirect input requirements,"
UFAE and IAE Working Papers
887.11, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Ferran Sancho, 2012. "Straightening out the concept of direct and indirect input requirements," Economics Bulletin, AccessEcon, vol. 32(1), pages 502-509.
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- Louis Mesnard, 2007. "A critical comment on Oosterhaven–Stelder net multipliers," The Annals of Regional Science, Springer, vol. 41(2), pages 249-271, June.
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