Fiscal Multiplier

AKA: Fiscal Economic Multiplier.
- …
Counter-Example(s):
- Money Multiplier.
- Keynesian Multiplier.
See: Economic Output Growth Value, Growth Rate, Economic Acceleration Principle, Multiplier–Accelerator Model.

References

(Wikipedia, 2016) ⇒ http://en.wikipedia.org/wiki/Fiscal_multiplier
- In economics, the fiscal multiplier (not to be confused with monetary multiplier) is the ratio of a change in national income to the change in government spending that causes it. More generally, the exogenous spending multiplier is the ratio of a change in national income to any autonomous change in spending (private investment spending, consumer spending, government spending, or spending by foreigners on the country's exports) that causes it. When this multiplier exceeds one, the enhanced effect on national income is called the multiplier effect. The mechanism that can give rise to a multiplier effect is that an initial incremental amount of spending can lead to increased consumption spending, increasing income further and hence further increasing consumption, etc., resulting in an overall increase in national income greater than the initial incremental amount of spending. In other words, an initial change in aggregate demand may cause a change in aggregate output (and hence the aggregate income that it generates) that is a multiple of the initial change.

(Wikipedia, 2016) ⇒ http://en.wikipedia.org/wiki/Multiplier_(economics)#Fiscal_multiplier
- Multipliers can be calculated to analyze the effects of fiscal policy, or other exogenous changes in spending, on aggregate output. For example, if an increase in German government spending by €100, with no change in tax rates, causes German GDP to increase by €150, then the spending multiplier is 1.5. Other types of fiscal multipliers can also be calculated, like multipliers that describe the effects of changing taxes (such as lump-sum taxes or proportional taxes).