multiplier effect
Spending begets more
The multiplier effect is the amplification of an initial economic change as it ripples through a system.
When a government spends a million dollars on infrastructure, workers spend their wages at local businesses, who then pay their employees, and so on—the total economic impact exceeds the original expenditure.
The multiplier effect of tourism extends far beyond hotels and restaurants.
The concept appears outside economics too: a small intervention can trigger disproportionately large consequences.
- rippleMinor surface disturbance
- cascadeSuccessive downward flow
- chain reactionSelf-sustaining causal sequence
- amplifyIncrease in strength
- leverageBorrowed capital for amplified returns
snowball · domino · knock on · chain · boost · stimulus · fiscal stimulus · spending · injection · feedback · virtuous cycle · compound · compound interest · accelerate · echo · propagate · investment · economic growth
multiplier effectcrowding out
When one thing excludes another
leakage · economic contraction · diminishing returns · capital flight · withdrawal
multiplier effectcontainment
Preventing hostile expansion
absorption · friction · dissipation · attenuation · dampening
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