It is the influence of macro-economy, but it is also a means of macro-control. The fiscal policy multipliers that study the impact of fiscal revenue and expenditure changes on the national economy include fiscal expenditure multipliers, tax multipliers and balanced budget multipliers.
Multiplier effect is a kind of macroeconomic influence, which refers to the influence degree of economic output fluctuation caused by changes in economic activities. In economics, the multiplier effect is more complete, that is, the expenditure/income multiplier effect. It is a concept of macroeconomics and a means of macro-control. It is to change the disproportionate economic demand by changing the leading position of total expenditure.
Multiplier effect changes variables in some way, resulting in the acceleration multiple of the final quantity increasing. It includes both positive and negative effects. When the government invests or expands public expenditure, tax revenue decreases, and the role of national income doubles, which leads to the expansion of macroeconomic impact. When government investment or public expenditure is cut, tax revenue increases and national income doubles and shrinks, thus producing macro-control effect. real effect
Get twice the result with half the effort/> Multiplier effect is a factor that needs to be considered when formulating macroeconomic policies. The management of policy implementation also has multiplier effect, which is a positive multiplier effect and the goal pursued by managers. For example, the implementation of marketing planning and promotion plan manager may get twice the result with half the effort, but it is often found that it is difficult to achieve the twice the result without the support of other strategies.
Another example is to encourage managers to take the result of this method and deal with it by incentive, but the best result is probably impossible only for some specific behaviors, spontaneous and sustained motives or incentive effects. Therefore, managers hope to get twice the result with half the effort, which will produce multiple results.
There are many examples of multiplier effect in ancient China. For example, loyalty and filial piety in ancient times get twice the result with half the effort. For loyalty and filial piety, their education or reward for kings or elders is limited to occasional admonitions or rewards, but the continuation of this idea can already achieve a good result with twice the effort.
However, we should pay attention to a question here, whether the multiplier effect is once and for all. Multiplier effect is a series of measures, including it Only when these corresponding measures play a role can the multiplier effect of drug action occur. The so-called supplementary measures are supplementary measures that have further played a role, such as management incentives. If the motivation is not good, it is impossible to continue to play its role without incentive mechanism. Must be appropriate, such as corporate culture, supporting, only by taking corresponding measures, multiplier effect can play a role. The effect of theoretical support connotation is twice the result with half the effort.
Keynesian multiplier theory comes from the famous article Employment, Interest and Money by john maynard keynes (1883- 1946), which is briefly described as follows:
A simple commodity market, such as a simple commodity market, is to consider only the commodity market, not the money market, foreign exchange market and other markets. In a simple commodity market, when the supply of wine cellars equals the demand, the trade balance equals the national economy in a state of balance.
Connotation of Keynesian multiplier theory
(1) trade balance: the calculation formula is: trade balance of a country = X-M, which is actually a function of three variables. The model shows: T = T (G, Y *, y).
Where, G represents the real exchange rate of the two currencies (G = E(P */P)), Y * represents foreign income and Y represents national income. It is proved by analysis that T = T 1-MY, 0, where T 1 stands for "independent trade balance" and m is called "marginal import tendency".
(2) Wine cellar and national income: when a country's domestic absorption is less than national income, there will be accumulated monetary assets, called "wine cellar", which is part of H's official income, that is, H = Y-note that wine cellar is different from savings.
In order to calculate the simple commodity market equilibrium, national income is the sum of two formulas: when H =-A 1+SY = T 1-MY = T, the solution: y0 = [1(s+m)] (a1+t
In a closed economic model (1), the consumption multiplier α =1/s =1/(1-c) =1(1-a), because in a closed economy,
(2) Investment multiplier: the multiplier effect of investment on national income. Investment and consumption multipliers are the same. This is because consumption, investment and government expenditure are isomorphic to form domestic absorption: A+C+I+G, which is equivalent to 1 (marginal propensity to absorb consumption) in the short term, and the multiplier effect is equal to S, because1-A = S. However, it needs to be specially stated that my investment will promote the long-term growth of the national economy, because when the investment income of the capital goods industry is high,
(3) Multiplier of government expenditure: government expenditure (including government consumption expenditure and government investment expenditure) is very similar, and residents invest in efficient consumption. Government procurement of goods and services will trigger a series of further expenditures. However, the multiplier effect of government expenditure will also appear the opposite situation. If government spending falls, while taxes and other factors remain unchanged, the decline in GDP will be equal to the amount of change multiplied by the multiplier in G. Therefore, the next government must know how many multipliers there are in any economic policy choice, whether it is expansionary or contractive, before taking action. Otherwise it will do great harm to the national economy.
Multiplier effect of open economy
In the open economy, the expansion effect of independent expenditure of national economy and the expansion ratio under closed conditions are small. This is because in the open economy, in the process of consumption expansion, part of the expenditure is the expansion effect of marginal consumption tendency in this action, thus introducing foreign economy into foreign goods and services. Then: α= 1 /(S+M).
For example, the country with marginal propensity to save is M S = 0.04 (that is, 4% savings rate) and the marginal propensity to import is m = 0. 16, so what is the national income multiplier of that country? α =1/(s+m) =1/(0.04+0.16) = 5, the marginal propensity to consume in country Z is s = 0.83 (that is, the savings rate is 83%), and the marginal propensity to import is m = 0./kloc-0. α =1/(s+m) =1/(0.83+0.1) =1.075. What a difference! One country's economy is at a low level, while another country is developing at a high speed.
Application of realistic multiplication and summation in real economic life
The key to grasping the multiplier objectively and accurately in fiscal policy lies in economic diagnosis and formulating countermeasures. Just like painkillers, doctors must know different doses. Similarly, economists and economic decision makers need to know the size of the government expenditure multiplier and the value of the tax multiplier. When the economy grows too fast or the economy is depressed for a long time, but drastic fiscal policy must be started, you must know the actual multiplier when you use the dose of "tax increase", "tax reduction" or "expenditure increase" before economic diagnosis and decision makers determine.
The effect of getting twice the result with half the effort cannot be mechanically copied, otherwise it is a drop in the bucket.
200 1 year, the United States encountered "9. 1 1 "terrorist attack", when two buildings were destroyed, Americans were very depressed. Some economists did not come out and made some ridiculous remarks, expressing a terrorist attack on the huge macroeconomic interests of the United States.
Their reason is that the emergency budget of $4 billion approved by the US Congress is based on the first round of demand and income, which is expected to bear fruit within one year, and this increased expenditure will continue to create the next round of demand. After some predictions, economists believe that in the current depressed American economy, when it increases the cost by $4 billion, the final GDP can be increased by 1000 billion ... When the economy is already weak, increasing fiscal expenditure is likely to be a booster.
& gt this seems a bit strange. If the loss of two buildings can promote economic development, then why don't Americans blow up several buildings themselves? Why are the big-box labor terrorists?
In addition to the opposite conclusion, it is also based on the multiplier principle. Multiplier principle, because it can amplify the benefits and shortcomings, is worth several buildings, and every casualty is priceless, so the American economy will regress into a vicious circle.
But in fact, the American economy is "9. 1 1", which is neither rapid nor failed. Are both conclusions wrong? Is it wrong to get twice the result with half the effort?
In fact, the problem is that I don't know one in social and economic life, but there are many situations. It is not that the "multiplier effect" does not exist, but it is not just a "multiplier effect" of a case. We should know that the current "multiplier effect" will cancel each other out and repel each other in many cases, and the result is unpredictable.