export multiplier

Export multiplierclick for a larger image
Fig. 69 Export multiplier. The effect of an increase in exports on national income. The additional exports (AE) serve to increase total injections and shift the injection schedule to the right, increasing national income by Y1 Y2 .

export multiplier

the ratio of the increase in a country's NATIONAL INCOME to the increase in the demand for the country's EXPORTS that brought it about. The INJECTION of increased exports into the CIRCULAR FLOW OF NATIONAL INCOME MODEL raises national income by some multiple of the original increase in exports. The value of the export multiplier depends on the country's MARGINAL PROPENSITY TO SAVE, MARGINAL PROPENSITY TO IMPORT and MARGINAL PROPENSITY TO TAXATION. The larger these propensities - the larger, that is, the ‘WITHDRAWALS’ from the income flow -the smaller will be the value of the export multiplier. See also MULTIPLIER, FOREIGN TRADE MULTIPLIER, EXPORT-LED GROWTH.
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A significant drop in economic activity occurring in 2009 can be explained by the reduction in foreign demand via the export multiplier during global recession.
The influence of foreign demand through export multipliers is analyzed in more detail.
Imports are leakages from the income flow, but if the net export value is positive, the net export multiplier is likely to boost domestic spending.
The short run investment, government expenditure and net export multipliers can be computed from (5) as:
The trend in the short-run investment, government spending and net export multipliers appears in figure 2.
I am more than happy to accept that the combined collapse in export and government expenditure set off multiplier effects through the economy that hit certain sectors hard, such as the Melbourne residential construction industry (and let us remember that the net export multiplier was self-evident to Australian economists such as de Lissa and Giblin, as it was to any publican from the Western Districts of Victoria, prior to Kahn and Keynes).
Assistance is allocated proportionally to the relative values of total output, export sales, total output or export multiplier for the targeted sector as these values provide some indication of the strength of the connectivity with the input suppliers.
The analysis shows that the overall leading simulation became S10 (previously S9 and both of the sector specific group) with the Shoalhaven region increasing its overall dominance with its other machinery and equipment sector remaining the main net-exports contributor despite its export multiplier falling slightly and representing mainly initial impacts with no industry support.
The extended analysis also provides details of simulation export multiplier changes for the regions and their sectors.
A clear conclusion is that the consumption multiplier is similar in magnitude to the export multiplier while the investment multiplier is the lowest of the three.
The investment multiplier was 4% higher while the export multiplier was 7% higher in 1994.
This article illustrates an application of the input-output model to estimate the investment multipliers and export multipliers for the Peruvian economy for the year 2002.

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