Fiscal Multiplier

Syllable breakdown

Dictionary meaning

The ratio of the change in national income (GDP) resulting from a change in government expenditure or taxation; a multiplier greater than 1 means that a dollar of government spending generates more than a dollar of economic output

Examples

• During recessions, the fiscal multiplier tends to be higher because idle resources are drawn back into productive use by government stimulus.
• Austerity economists contested the IMF's finding of a fiscal multiplier above 1.5 during the eurozone debt crisis.

Synonyms: spending multiplier, Keynesian multiplier, government expenditure multiplier