Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Oct, 1950, Volume 18, Issue 4

The Multi-Sector Multiplier<355:TMM>2.0.CO;2-4
p. 355-374

John S. Chipman

The concept of the multiplier is extended to an economy composed of a number of sectors, such as countries, regions, industries, classes, and functional groups, or individuals, firms, and governments. The economy should be divided to such anextent as to maximize the stability of the parameters. If all the participating groups have the same marginal propensity to spend, the conventional multiplier formula is obtained. Some properties of such a system are described--in particular, the conditions for dynamic stability; the effect of changes in relative prices is also introduced.

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