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Related to Accelerators: Particle accelerators, Linear accelerators

Accelerator Principle

The idea that a small change in consumer behavior can have a large effect on a company's investment. For example, suppose $100 of investment in a bakery produces $100 worth of baked goods. If consumers usually buy $100 of baked goods each year but this increases to $110, the bakery must buy 10% more equipment, baking materials, and so forth, which can increase the amount it invests in its suppliers by more than 10%. The accelerator principle exacerbates advances and declines; it is used in various models of the business cycle. See also: Multiplier.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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Fig. 2 Accelerator. The graph shows how gross national product and the level of investment vary over time.


the relationship between the amount of net or INDUCED INVESTMENT (gross investment less REPLACEMENT INVESTMENT) and the rate of change of NATIONAL INCOME. A rapid rise in income and consumption spending will put pressure on existing capacity and encourage businesses to invest, not only to replace existing capital as it wears out but also to invest in new plant and equipment to meet the increase in demand. By way of simple illustration, let us suppose a business meets the existing demand for its product, utilizing 10 machines, one of which is replaced each year. If demand increases by 20%, it must invest in two new machines to accommodate that demand in addition to the one replacement machine.

Investment is thus, in part, a function of changes in the level of income: I = f(AY). A rise in induced investment, in turn, serves to reinforce the MULTIPLIER effect in increasing national income.

The combined effect of accelerator and multiplier forces working through an investment cycle has been offered as an explanation for changes in the level of economic activity associated with the BUSINESS CYCLE. Because the level of investment depends upon the rate of change of GNP, when GNP is rising rapidly then investment will be at a high level, as producers seek to add to their capacity (time t in Fig. 2). This high level of investment will add to AGGREGATE DEMAND and help to maintain a high level of GNP. However, as the rate of growth of GNP slows down from time t onward, businesses will no longer need to add as rapidly to capacity, and investment will decline towards replacement investment levels. This lower level of investment will reduce aggregate demand and contribute towards the eventual fall in GNP. Once GNP has persisted at a low level for some time, then machines will gradually wear out and businesses will need to replace some of these machines if they are to maintain sufficient production capacity to meet even the lower level of aggregate demand experienced. This increase in the level of investment at time t1 will increase aggregate demand and stimulate the growth of GNP Like FIXED INVESTMENT, investment in stock is also to some extent a function of the rate of change of income so that INVENTORY INVESTMENT is subject to similar accelerator effects.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
Accounting Package Accelerators can be installed within minutes and require virtually no ongoing maintenance, which GXS says allows businesses with limited IT staffs and budgets to fully leverage its benefits.
One of the main objectives of the accelerator [which speeds up particles for their study] we are building is to find Higgs particles.
"These results represent the most significant step so far for laser-based accelerators and should stimulate further advances in the near future" says Thomas Katsouleas of the University of Southern California in Los Angeles in a commentary accompanying the reports.
Moreover, since new iSCSI accelerators also support iSCSI initiator and target functionality in Linux, the benefits of iSCSI accelerators such as Xiran's, easily transfer to Linux to provide a complete and flexible iSCSI solution.
Microsoft's accelerators promise to transform the office desktop into a business productivity system by giving the underlying data in applications the portability and access of XML-enabled data.
The Expand ACCELERATORs are important to DOI's communications infrastructure cost-saving efforts, and the department intends to continue deploying them throughout its Bureaus.
The National Oncology Center on November 6, 2018 announced tender for purchase of linear accelerators. 352, 26,000 som were offered for these purposes.
The accelerator programme, which commenced yesterday (July 7) in Jeddah, Saudi Arabia, will last for three months, providing a number of advisory services, most notably investment, training, follow-up, workshops, along with continuous guidance for developing entrepreneurial innovations, and transforming them into existing projects within 90 working days, said a statement from the organisation.
Summary: Manipal (Karnataka) [India], Aug 14 (BusinessWire-India): An indigenously designed and fabricated Tabletop Accelerator (TTA) delivered the first beam on target on Tuesday at the Manipal Centre for Natural Sciences (MCNS), Manipal Academy of Higher Education (MAHE), Manipal.
To explore how corporations can address these two related issues, we examined the case of Orange, a multinational telecommunication operator that has built a robust corporate acceleration capability, launching 12 corporate accelerators worldwide in just three years.