Multiplier effect

From Citizendium
Revision as of 07:17, 19 September 2008 by imported>Sylvain Catherine (see spending multiplier)
Jump to navigation Jump to search
This article is developing and not approved.
Main Article
Discussion
Related Articles  [?]
Bibliography  [?]
External Links  [?]
Citable Version  [?]
 
This editable Main Article is under development and subject to a disclaimer.

In economics, the multiplier effect refers to the fact that an increase of an economic aggregate may lead to an increase of this aggregate or another greater than the initial raise. See Spending multiplier.

The multiplier effect is also known by bankers. An initial mortgage creates a deposit on a client account. This deposit can be partially lent to another client and so on.