locomotive principlethe principle that, in a worldwide RECESSION, one country, by expanding its AGGREGATE DEMAND, will increase its demand for IMPORTS, stimulating the EXPORTS of other countries and so increasing economic activity in those other countries. In this way, one country can act as a locomotive to pull other countries out of recession but at some expense to its balance of payments. See FOREIGN TRADE MUTIPLIER.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005