Academic literature on the topic 'Multiplier-accelerator effect'

Abstract This study examined the direct/indirect long-run relationships and dynamic interactions between public investment (PI) and output performance in Nigeria using annual data spanning 1970-2010. A macro-econometric model derived from Keynes’ income-expenditure framework was employed. The model was disaggregated into demand and supply sides to trace the direct and indirect effects of PI on aggregate output. The direct supply side effect was assessed using the magnitude of PI multiplier coefficient, while the indirect effect of PI on the demand side was evaluated with marginal propensity to consume, accelerator coefficient and import multiplier. The results showed relatively less strong direct effect of PI on aggregate output, while the indirect effects were stronger with the import multiplier being the most pronounced. This is attributed to declining capital expenditure, poor implementation and low quality of PI projects due to widespread corruption. By and large, we concluded that PI exerted considerable influence on aggregate output.

This article introduces the underground economy into a standard multiplier-accelerator model with linear progressive income taxation. The main results are that this introduction increases the instability of the overall economy towards chaos, that tax policy plays a critical role in preserving stability even if in the sense of a uniform cycle and that the operation of the accelerator may be countering the negative effect of tax evasion on tax revenue. JEL Classification: O17, E32, H24

The article substantiates the necessity to introduce systematic and effective tax eco-reforms in the context of resource-oriented economic development by the European Union countries. The performance and effectiveness of the reforms are estimated in relation to the main four groups of environmental taxes: energy taxes, pollution taxes, resource taxes and transport taxes. The macroecological policy of the European Union countries is the object of the undertaken analysis. The article examines the impact of macroeconomic factors on environmental taxes across the EU, using a correlation analysis toolkit. Four groups of macroeconomic parameters were selected for analysis: internal macroeconomic factors (nominal GDP, real GDP, inflation, business cycle stage, budget deficit, energy consumption level); external macroeconomic factors (government debt, exports, foreign direct investments); institutional macroparameters (environmental culture, shadow economy, trust in government) and fiscal macroparameters (tax culture and fiscal freedom). The economic interpretation of the obtained correlates is given. Based on the correlation analysis, stimulators and de-stimulators of tax environmental reforms across the EU were identified. It is established that the factors that positively influence on the tax environmental reforms are the overwhelming majority of the analyzed factors. The formation of indicators of the effectiveness of tax environmental reforms is undertaken for six countries of the Community. In particular, the analysis covers three economic leaders (Germany, the United Kingdom and France) and three leading EU countries in the field of environmental tax collection (Latvia, Greece and Slovenia). The article presents approaches to improving the assessment of the effectiveness of tax environmental reforms based on the consideration of fiscal (budget-filling) and reproductive (multiplicative) functions of environmental taxes. In this regard, the environmental tax multiplier and accelerator, as well as the GDP elasticity coefficient for environmental taxes, were calculated for the analyzed group of countries. The criteria of economic efficiency of tax eco-reforms are proposed. Keywords: environmental taxes, macroeconomic effect, macro-environmental policy, multiplier, accelerator, elasticity

The paper proposes an approach to the description of macroeconomic phenomena, which takes into account the effects of fading memory. The standard notions of the accelerator and the multiplier are very limited, since the memory of economic agents is neglected. We consider the methods to describe the economic processes with memory, which is characterized by the fading of a power-law type. Using the mathematical tools of derivatives and integrals of non-integer orders, we suggest a generalization of the concept of the accelerator and multiplier. We derive the equations of the accelerator with memory and the multiplier with memory, which take into account the changes of endogenous and exogenous variables on a finite time interval. We prove the duality of the concepts of the multiplier with memory and the accelerator with memory. The proposed generalization includes the standard concepts of the accelerator and the multiplier as special cases. In addition these generalizations provide a range of intermediate characteristics to take into account the memory effects in macroeconomic models.

Kenya has emerged in recent times as one of the fastest growing telecom markets in the world. There is not a single, widely used paradigm which has synthesised the various schools and theories dealing with technology and society. This article argues that the issue of mobile technology on society is a complex technical and social phenomenon that needs to be understood from both ICT and social science perspectives. This study used the concept of governance socio-techno-economic systems as the theoretical framework. System dynamics are used as both the methodology and tool to model the mobile industry impact on society. The study shows that the increase in social capital intensity is an important source of the economic growth. This increase will strengthen the accelerator mechanism of the economy and creates larger multiplier effects. The increase in social capital intensity can be obtained through managing innovation processes base on the development of education and the R&D capacity of the nation.

The author examines the negative impact of rationality gaps on the country’s economic development and economic security. The relationship between the gaps of rationality and the mechanism of the investment multiplier is analyzed. The article defines the notion of «the gap of rationality,» three types of the gaps of rationality. The definition of the effects of the multiplier and the accelerator of investment is given. It is indicated that the relationship between the multiplier and the accelerator of investments is complex, fractal in nature. Inside the mechanism of the investment multiplier there are components, both strengthening and weakening its effect. It is revealed that people with irrational behavior do not realize their irrationality. With the gaps of rationality, people can realize the irrationality of their behavior, but they continue to behave irrationally. The gaps of rationality lie in the fact that the goal is not a sufficient reason for carrying out actions. Decision-making does not automatically mean the appropriate action. Even after making a decision and starting the action, we can not expect that it will automatically end. The article proves that the multiplicative effect enhances the negative impact of rationality gaps on the economy. Specific directions of this influence are considered depending on the type of the gaps of rationality. For each direction, the negative effect of the multiplier effect generated by the gaps of rationality is described. As a result of the study, it was concluded that the negative impact of human irrationality on economic processes must be studied in conjunction with the spread of multiplicative effects in the economy. Keywords: the multiplier of autonomous spending; the accelerator o

<p class="MsoBodyText2" style="line-height: 11pt; text-indent: 0in; margin: 0in 34.2pt 0pt 0.5in; mso-line-height-rule: exactly;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">In this paper we consider a closed economy and using the multiplier &ndash; accelerator principle we develop a simple dynamic New Keynesian type model in our effort to determine the time paths of income, actual and expected inflation towards their long &ndash; run equilibrium values. The equilibrium values of actual and expected inflation are proved to be affected by government expenditures and the growth rate nominal money supply. Assuming that the Central Bank is interested in stability of real stock of money supply, we specify the rule of determination of the growth rate in nominal money supply. The use of this rule guarantees the equality between inflation and the growth rate of nominal money supply and permits Central Bank to offset the effects of an expansionary fiscal policy on the real stock of money. The theoretic conclusions of our analysis are affirmed by the simulation results presented in the fourth section of our paper.<span style="mso-spacerun: yes;">&nbsp; </span></span></span></p>

The function of the construction industry in an economy has proven to be beneficial, especially during the economic downturn. The nature of the products of the construction industry makes it possible for the government to utilise the industry as a means to accelerate and multiply the economy by utilising the fiscal budget to build infrastructures. By so doing, the economy will be multiplied as the construction industry is an industry that produces investment goods. However, due to the nature of the Malaysian construction sector, the expenses required to stimulate the economy could not be made to the maximum extent, as the industry relies heavily on immigrant construction workers to address its labour supply problem. Immigrant construction workers are known for their high tendency to remit their salary to their country of their origin. This scenario disturbs the economic cycle within the Malaysian economy and, hence, dampens the function of the construction industry as the multiplier-accelerator provider. This research was undertaken to better manage the cash flow economic cycle leakage by adopting some economic measures coupled with improvised management of immigrant construction workers exercised through legislation. The adopted research methodology used transformative mixed-methods to balance the limitations of a single research approach. A literature review of the economic models and tools were conducted in a search for the most suitable measures, while attempting to understand the nature of construction industry by highlighting the structure and the problems associated with the industry. Special attention was also given to investigate the motivation behind the human migration to justify and support the research. Other than issues involving the use of immigrant workers, special attention was given to issues of remittances and its impacts on the global economy. The findings underpinned by literature and the research findings were used to develop the conceptual framework to manage the economic cycle leakage that is entrenched in the construction industry s economic cycle. The integrated framework consists of economic, management and legislation and was developed to address the issues highlighted. The use of economic tools can only be materialised through better management and the execution of legislation. The framework was encapsulated in a combination of process protocol and a maturity framework to allow time for the policy makers to implement it. Considerations have been made to develop the framework to ensure the smooth transition its implementation. The framework was self-validated through formative evaluations where data were attained from several parties to reduce any bias perspective. In addition, most of the measures suggested were derived from interviews conducted among the respondents. Several benefits of the framework were identified. It is concluded that the impact of immigrant construction workers employment can be managed by considering the appropriate tools in the form of economic, managerial and legislation measures. This research has developed an integrated process protocol maturity framework that addresses the three aforementioned aspects. The framework is simple and easily understandable with detailed activity zones that entail specific tasks that must implemented by different parties. The developed framework is expected to aid the authorities in managing immigrant construction in Malaysia and to effectively manage these workers. The framework also allows time for its implementation through the maturity stages suggested.

This chapter reviews the theory related to business cycles. After outlining early approaches (including the multiplier-accelerator interaction and Goodwin cycles), it proceeds to discuss the modern debates between New Classical/Real Business Cycle (RBC) theorists and New Keynesians. This discussion is structured at various levels: more intuitive and discursive, then more analytical with the development of a formal RBC model and of a Dynamic Stochastic General Equilibrium model that synthesizes the two approaches. The chapter continues with a review of Vector Autoregressions. Finally, a narrative of a number of episodes is offered: the Great Depression, post-World War II cycles, Japan, effects of oil on business cycles, and the Great Recession (2007–9) and the subsequent slow recovery. The overarching philosophy is that a suite of models, old and new, and approaches, modelling, econometric, and narrative, are useful in offering complementary perspectives.