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A convenient policy control through the Macro Multiplier Approach

Author

Listed:
  • Maurizio Ciaschini

    (not available)

  • Rosita Pretaroli

    (not available)

  • Claudio Socci

    (Unversità di Macerata)

Abstract

In this paper an attempt is made to identify a ”convenient” structure of a policy variable, final demand control, through the use of a multi-sectoral model. The method used relies on a specific spectral ecomposition which allows for the quantification of the scale-effect of each structure that the policy variable can assume on the structures of the objective ariable. This quantification is of aggregated type since the scalars obtained are valid for all sectoral components of both the policy variable and the objective variable. What is more relevant they are consistent with the multi-sectoral feature of the model, overcoming the objections put forward by the theory of aggregation. In fact the aggregation theory states that if we aggregate sectors we obtain a new model with different structural properties, while, in our case, the aggregated scalar that we obtain for each structure is perfectly consistent with the original model. We call these scalars Macroeconomic Multipliers since they say how many time the modulus of the multi-sectoral policy variable is multiplied when we compare it with the modulus of the effects observed on the multi-sectoral objective variable. Once identified the structures and the associated Macro Multipliers, the policy maker can have a complete picture of the economic structure of the objective variables that can be attained and determine a ”convenient” structure of the policy variable choosing either one structure or a combination of the structures identified.

Suggested Citation

  • Maurizio Ciaschini & Rosita Pretaroli & Claudio Socci, 2006. "A convenient policy control through the Macro Multiplier Approach," Working Papers 02-2006, Macerata University, Department of Studies on Economic Development (DiSSE), revised Nov 2008.
  • Handle: RePEc:mcr:wpaper:wpaper00002
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    References listed on IDEAS

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    1. Ciaschini, Maurizio, 1989. "Scale and structure in economic modelling," Economic Modelling, Elsevier, vol. 6(4), pages 355-373, October.
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    More about this item

    Keywords

    IO model; Structural Change; Multipliers Analysis;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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