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New Measures from Input-Output Studies: A Comparison of Traditional Multipliers and Growth-Equalized Multipliers

Published online by Cambridge University Press:  10 May 2017

Sharon M. Brucker
Sharon M. Brucker*
Affiliation:
Department of Agricultural and Food Economics, University of Delaware
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Abstract

The use of traditional multipliers in analyzing the impact of alternative development policies should only be undertaken with a full understanding of the theoretical constraints inherent in such an approach. Theoretical input-output models assume perfectly elastic supply of all inputs and demand for all outputs. Thus, traditional multipliers abstract from the relative size of changes in final demand, or production, since any change is theoretically possible. In actuality, supply and demand elasticities are not infinite. It may not be possible to increase sales to final demand by 300 percent; nor (due to land, labor or capital input scarcities) is it likely that a sector's production can increase by 100 percent. Therefore, in practice, some measure of the feasibility of a proposed change needs to be considered.

Type
Contributed Papers
Information
Journal of the Northeastern Agricultural Economics Council , Volume 9 , Issue 2 , October 1980 , pp. 69 - 74
Copyright
Copyright © Northeastern Agricultural and Resource Economics Association 

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References

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