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Article
Some Conceptual Difficulties Regarding 'Net' Multipliers
Annals of Regional Science (2013)
  • Ferran Sancho, Universitat Autonoma de Barcelona
Abstract
Multipliers are routinely used for impact evaluation of private projects and public policies at the national and subnational levels. Oosterhaven & Stelder (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 is 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.
Publication Date
2013
Citation Information
Ferran Sancho. "Some Conceptual Difficulties Regarding 'Net' Multipliers" Annals of Regional Science Vol. 51 Iss. 2 (2013)
Available at: http://works.bepress.com/ferran_sancho/54/