More on multipliers
Recently, Oosterhaven and Stelder (2002, Journal of Regional Science, 42, 533–543) (OS) addressed the issue of measuring the economic importance of an industry. In practice, the traditional multipliers are commonly multiplied by, for example, the outputs. According to OS, this is a misuse that leads to double counting, a correction for which results in their net multipliers. In this note, I will provide an economic interpretation, which suggests that net multipliers may be a good choice for descriptive purposes. The comment by de Mesnard (2002, Journal of Regional Science, 42, 545–548) adopts a different viewpoint. Following his approach, I will show that also the common procedure—which was the central point of rejection in OS—has a sound economic interpretation. In its turn, this yields an alternative interpretation for the matrices used in supply-driven input–output models.
Document Type: Research Article
Affiliations: Faculty of Economics, University of Groningen, Groningen, The Netherlands., Email: firstname.lastname@example.org
Publication date: May 1, 2005