How does an accelerator work in economics? Multiplier and accelerator: concept and role in economic science. Boost in the economy

The concept of "multiplier" means “multiplying” and was introduced into economic theory in 1931 by the English economist R. Kahn. During the period of struggle against the crisis and unemployment, he found that government spending on any area of public works leads to a “multiplier” effect of employment. Every new area of work, generating primary employment, acts as an impetus for corresponding costs in other interconnected areas, causing secondary, tertiary, etc. employment. Thus, the initial costs are “multiplied” by multiples of employment.

In the theory of J. Keynes, under the multiplier refers to a numerical coefficient that shows the dependence of changes in income on changes in investments. The multiplier effect in a market economy is that an increase in investment leads to an increase in national income, which increases by a much larger amount than the initial increase in investment. This is the result of the fact that investment, in addition to the primary effect in the form of growth in national income and employment, causes secondary, tertiary, etc. effects. This growing effect is called cartoon effect. Its quantitative value is determined by a special numerical coefficient - the multiplier (K), which shows the ratio in which national income (Y) increases compared to the increase in investment (J) when the equilibrium state of the economy is reached.

∆Y = K∆ J, i.e., the multiplier multiplied by the increase in investment shows the increase in national income.

Acceleration principle.

Accelerator(accelerator) is a coefficient that represents the ratio of investment growth to the relative increase in income that caused it:

A – accelerator;

Y - investment;

The accelerator serves as a quantitative expression of the principle of “acceleration”, according to which each increase or decrease in income causes (or requires) an increase or decrease in “induced” investments. This principle was put forward in 1913 by the French economist A. Aftalion and in 1919. American economist J. Clark and was subsequently used in neo-Keynesian models of economic growth.

The acceleration principle denotes a sharper dynamics of growth (decrease) of investments compared to the dynamics of income that causes them.

When studying savings and inversions in the economic literature, two approaches have emerged:

Classic approach. For a long time, one of the fundamental principles of economic theory was the position that the larger part of the income is used for savings, the higher the rate of economic growth of the country, the faster the national income increases and the standard of living of the population rises. Representatives of classical economic theory substantiated this position by the fact that a low propensity to save narrows resource investment opportunities, as a result, the rate of production development decreases, and social progress slows down.

Keynesian approach. Studying the processes of savings and investment, J. Keynes came to the conclusion that the traditional approach, the main principle of which is to increase the propensity to save and thereby increase the rate of investment, is not applicable for countries that have reached a high stage of economic development.

"The Paradox of Thrift." To establish why saving as a good intention turns into its opposite, we need to look at investing.

Autonomous investments, not related to the growth of national income, are carried out in the form of primary investments, which lead to an increase in business activity, employment growth, and investment expenses of various groups of entrepreneurs. Such investments are usually called derivative or induced. Their implementation is determined by a steady increase in demand for goods.

Derivative investments as a complement to autonomous ones, they accelerate the rate of economic growth, as a result, the multiplier effect is enhanced. This strengthening is carried out according to the principle of acceleration, when the demand for investment is caused by an increase in sales and income.

At the same time, with underemployment, an increase in the propensity to save inevitably leads to a decrease in the propensity to consume. As a result, the so-called "paradox of thrift": The more people save, the lower the equilibrium income. This conclusion is directly related to the multiplier, the value of which is inversely proportional to the marginal propensity to save.

Question No. 50.

Essence, indicators, factors and types of economic growth (EG).

Economic growth- a complex multifaceted phenomenon that characterizes the progressive development of national households The dynamics of economic growth are widely used in assessing the efficiency of production and the technical level of development. and also for cross-national comparisons.

Economic growth and economic development. These concepts are not identical. Economic growth is a component of economic development, which refers to a process that includes both periods of growth and decline. Economic growth is a positive component of the dynamics of economic development.

Economic growth indicators. To characterize one or another aspect of economic growth, a number of specific indicators are used. They are divided into:

Dynamic indicators– indicators that characterize the macroeconomic development of the country’s economy (growth rates over a certain period of time). They make it possible to establish the rate of expansion of production and identify the potential production capabilities of the country. When calculating indicators of production development in dynamics, the important point is to compare the growth rate of material goods with population growth. If national income increases in accordance with population growth, this essentially means stagnation of economic development.

Statistical indicators reflect the existence of conditions for the equilibrium state of various processes. With their help, the initial basis of economic development is determined. The pace and level of economic development are closely related. for example, at different initial levels, the same growth rates lead to a widening gap in the economic development of different countries.

Qualitative and quantitative indicators. The integrating indicator of economic growth is "standard of living".

Standard of living of the population– degree of satisfaction of physical, spiritual and social. people's needs. To determine the real picture of the standard of living, the so-called “consumer basket” is used.

A consumer basket is a set of products and non-food goods and services that provide a certain level of consumption.

Factors of economic growth– this is its driving force, the main points of productive forces, which in the process of interactions ensure an increase in volumes and an increase in its efficiency.

In the economic literature, there are different approaches to determining the list of main factors of economic growth. Some scientists attribute to them an increase in factors such as labor, capital, technical innovations; others identify 6 main factors - 4 supply factors (quantity and quality of natural resources; quantity and quality of labor resources; volume of fixed capital, technology), demand factors and distribution factors.

In domestic literature, factors of economic growth usually include:

1 – labor force;

2 – production resources;

3 – technology;

4 – nature.

By way of influencing economic growth factors are divided into:

1. Direct factors of economic growth (quantity and quality of natural resources; volume and quality of fixed capital; quantity and quality of natural resources; technology).

2. Indirect factors of economic growth (reduction of income taxes, expansion of opportunities for obtaining loans, reduction in prices for production resources).

Types of economic growth:

1. Extensive type- the result of a quantitative increase in factors of production while maintaining its previous technical basis (a simple expansion of the production field).

Advantages: ease and simplicity of ensuring economic growth, subject to the availability of labor, raw materials, free territories; speed of development of natural resources; creating conditions for relatively high employment of the population with a reduction in unemployment.

Disadvantages: technical stagnation; stagnation of production, which occurs as a result of the exhaustion of labor and production resources or favorable conditions for obtaining them; depletion of natural resources; strengthening the costly nature of production.

2. Intensive type is based on the widespread use of highly efficient, qualitatively advanced factors of production.

Features: a sharp increase in the knowledge intensity of production; widespread development of the production and use of scientific and technical information; overcoming barriers to economic growth caused by limited resources.

Types of intensification:

1 – labor-saving (the entire increase is achieved through the use of new technology and increased labor productivity);

2 – capital-saving (economical use of means of production through the use of more efficient machines and equipment, the use of qualitatively new raw materials);

3 – mixed type (saving labor and material factors).

3. Mixed (or real) type.

Economic growth models: the simplest model of equilibrium growth; equilibrium growth model; neo-Keynesian model of dynamic equilibrium; Harrod model; Domar model.

Accelerator (in economics) Accelerator, accelerator, in modern bourgeois macroeconomics, the ratio of the increase in investment to the relative increase in income, consumer demand or finished products that caused it. A. expressed by the formula

(where I is investment, Y is income, t is time). It serves as a quantitative expression of the “acceleration principle,” according to which each increase or decrease in income, demand or production causes (or requires) a larger relative (percentage) increase or decrease in “induced” investment. This principle, put forward by A. Aftalyon in 1913 and J.M. Clark in 1919, was subsequently developed in more detail by the Englishman R. Harrodom and Americans J. Hicks, P. Samuelson and is included in neo-Keynesian models of economic growth (see Economic growth theory). The reasons for the sharper dynamics of increases (reductions) in investments compared to the dynamics of income or demand that cause them are the length of the production time of equipment, as a result of which, in the period between the emergence of demand for additional equipment and its release, unsatisfied demand pushes for the expansion of production beyond the initial demand; in the duration of equipment use, as a result of which the percentage of new investments to restoration investments is greater than the percentage of increase in products, the demand for which causes new investments. [If, for example, with a fixed capital of 500 million dollars, which wears out annually by 10% ($50 million), the demand for finished products increases by 10%, then investments will be required not only to compensate for the depreciation of fixed capital, but also for additional expansion capital to meet increased demand (by $50 million). An increase in demand for finished products by just 10% causes gross investment in equipment to double]. In macroeconomic models, A. is combined with cartoonist(multiplier) in the form of the Hicks national income equation:

Yt = At + [ 1 - s ] Yt-1 + v[ Yt-1 - Yt-2 ] ,

where A is autonomous investment, (I ‒ s) is the share of consumption in national income or its growth. Depending on the ratio of the multiplier (or the coefficient of propensity to consume) and A., the dynamics of national income (Y) or its increments can take on a uniform or cyclical character. Cyclic fluctuations occur when the ratio

[(1 - s) + v]2< 4v .

Thus, the principle of A. is considered by bourgeois economists as one of the main explanations of the causes of the economic cycle.

The rational elements of the concept of A. consist in characterizing certain technical proportions between the replacement and expansion of fixed capital, as well as in displaying turning points in the dynamics of investment during the transition from one phase of the cycle to another. The fundamental defects of this concept are: the replacement of the actual causes of the capitalist cycle with technical dependencies in the process of reproduction of fixed capital; in the erroneous idea of the dynamics of investment as a function of income and consumer demand, while under capitalism it is determined by the pursuit of profit; in the contradiction between the acceleration principle and the real process of reducing the capital intensity of products; in ignoring the possibilities of meeting demand without additional investments through more complete utilization of equipment and intensification of its use. Like all models of bourgeois macroeconomics, the African model reflects only some external functional connections, ignoring the actual cause-and-effect dependencies of the reproduction process.

Lit.: Samuelson P., Economics, Introductory course, trans. from English, M., 1964, p. 289 - 303; Alter L.B., Multiplier and accelerator models in macroeconomic dynamics, in: Capitalist reproduction in modern conditions, M., 1966, p. 107 - 128; by him, Bourgeois Political Economy of the USA, M., 1961, ch. XIII, p. 593 ‒ 609: Hansen A. N., Business cycles and national income, N. Y., 1951; With lark J. M., Business acceleration and the law of demand, in: Readings in Business Cycle theory, pt 3, Phil. ‒ Toronto, 1944.

L. B. Alter.

Great Soviet Encyclopedia. - M.: Soviet Encyclopedia. 1969-1978 .

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The essence of the macroeconomic direction of science

Throughout the existence of mankind, economic relations have developed and become more complex. The growth of commodity exchange was facilitated by the emergence of a single equivalent of value, first in kind and then in monetary form. Private property marked the beginning of the specialization of labor and the emergence of the first forms of production. Qualitative and quantitative changes in the economic life of society occurred with the advent of the industrial revolution. It not only changed production volumes, but also contributed to the formation of new principles for the formation of demand and people's needs. International trade began to develop thanks to the Great Geographical Discoveries. However, until the mid-nineteenth century, economics did not exist as a separate science. Scientists examined economic life from different angles, deduced patterns, but used qualitative assessments and acted in the interests of the ruling class. When the transition to an independent analysis of actual economic events occurred, then economics became a separate branch of scientific knowledge.

Within the framework of economic science, two fundamental directions have been formed - micro- and macroeconomics. The first considers economic systems created by individual economic entities, for example, households, enterprises, and so on. Macroeconomics studies the economy at the level of the state, the world, or international economic relations. The objects of her research are the aggregate indicators of economic activity of the economic system. For example, gross domestic product and domestic national product, manifestations of economic behavior (growth, cycle, inflation rate, unemployment rate). This also includes various economic factors and policies in the sphere of economic life.

The goals of macroeconomics are:

in creating conditions that will create conditions for economic growth and improving the general standard of living of citizens;
in maintaining a stable price level and curbing inflation;
in ensuring maximum employment rates;
in creating international relations that will maintain the competitiveness of the national economy.

Multiplier in economics and its types

In order to predict the economic effect of investing in the future, it is assumed that the subject will put part of the money into savings and part into circulation. The multiplier effect is that it sums the contributions of all entities to calculate the final national income at a certain point in time.

The multiplier is used both to evaluate the performance of an enterprise and to study trends in national and global economic systems. It is a coefficient that evaluates the dependence of economic growth on the volume of investment. This term was introduced into macroeconomics in the thirties by the English economist Kahn.

The multiplicative effect is that taking any directed action should lead to a certain result. For example, investments in the economy by the state in business development are made in order to stimulate economic growth of the national economy.

Note 1

An indicator of the effectiveness of economic decisions at the national level is the gross domestic product. If we talk about the GDP growth multiplier, it shows the return on investment in the country's economy. The multiplier grows if the consumer is willing to spend, thereby expanding demand. If the population tends to accumulate, then the multiplier effect decreases.

There are many types of this indicator that consider various aspects of economic life:

expense multiplier;
net taxes;
autonomous taxes;
gross rent multiplier.

Definition and economic essence of an accelerator

Another macroeconomic indicator is the accelerator. It shows an inverse relationship than the multiplier, namely, investment growth depending on income growth. Autonomous operations related to investments, with an increase in overall profits, stimulate investment in production activities. This dependence is called the accelerator effect or acceleration. However, the acceleration may be reversed if income decreases. At the same time, investment in production will also decrease, which can ultimately lead to economic stagnation.

In a simplified form, the accelerator is expressed through the volume of investments of the current period and the amount of income from the past. This dependence is represented by the formula:

$a = I_t / V_t – V_(t-1)$

Thanks to the formula, you can clearly see the dependence of investments on a biased reaction to last year's income. If there is a tendency for the subject’s profit to grow, then in the current and future periods the growth of investments will be more intense. If income decreases, then investments decrease by the same factor. The accelerator and multiplier are related to each other.

In the case of variable performance of autonomous investments, the accelerator effect does not work. The propensity to consume increases, which means the amount of savings decreases. Ultimately, income and investment will decrease. At the macroeconomic level, this trend will cause an economic downturn. The combined effect of the multiplier and accelerator looks like a spiral that periodically compresses and decompresses.

Note 2

The discovery of the multiplier and accelerator made it possible to consider from a new perspective the principles of the formation of economic growth and its cycles. Investments by individual entities can contribute to growth, provided that the accelerator, propensity to save, and capital productivity remain unchanged.

ACCELERATOR (IN ECONOMY)

accelerator, in modern bourgeois macroeconomics, the ratio of the increase in investment to the relative increase in income, consumer demand or finished products that caused it. A. expressed by the formula

(where I is investment, Y is income, t is time). It serves as a quantitative expression of the “acceleration principle,” according to which each increase or decrease in income, demand or production causes (or requires) a larger relative (percentage) increase or decrease in “induced” investment. This principle, put forward by A. Aftalion in 1913 and J. M. Clark in 1919, was subsequently developed in more detail by the Englishman R. Harrod and the Americans J. Hicks, P. Samuelson and included in neo-Keynesian models of economic growth (see Economic growth theory) . The reasons for the sharper dynamics of increases (reductions) in investments compared to the dynamics of income or demand that cause them are the length of the production time of equipment, as a result of which, in the period between the emergence of demand for additional equipment and its release, unsatisfied demand pushes for the expansion of production beyond the initial demand; in the duration of equipment use, as a result of which the percentage of new investments to restoration investments is greater than the percentage of increase in products, the demand for which causes new investments. [If, for example, with a fixed capital of 500 million dollars, which wears out annually by 10% ($50 million), the demand for finished products increases by 10%, then investments will be required not only to compensate for the depreciation of fixed capital, but also for additional expansion capital to meet increased demand (by $50 million). An increase in demand for finished products by just 10% causes gross investment in equipment to double]. In macroeconomic models, A. is combined with a multiplier (multiplier) in the form of the Hicks equation of national income:

Yt At + [ 1 - s ] Yt-1 + v[ Yt-1- Yt-2 ] ,

where A is autonomous investment, (I - s) is the share of consumption in national income or its growth. Depending on the ratio of the multiplier (or the coefficient of propensity to consume) and A. the dynamics of national income (Y) or its increases can take on a uniform or cyclical character. Cyclic fluctuations occur when the ratio

[(1 - s) + v ]2< 4 v .

Thus, the principle of A. is considered by bourgeois economists as one of the main explanations of the causes of the economic cycle.

Lit.: Samuelson P., Economics, Introductory Course, trans. from English, M., 1964, p. 289 - 303; Alter L.B., Multiplier and accelerator models in macroeconomic dynamics, in: Capitalist reproduction in modern conditions, M., 1966, p. 107 - 128; by him, Bourgeois Political Economy of the USA, M., 1961, ch. XIII, p. 593 - 609: Hansen A. N., Business cycles and national income, N. Y., 1951; With lark J. M., Business acceleration and the law of demand, in: Readings in Business Cycle theory, pt 3, Phil. - Toronto, 1944.

L. B. Alter.

Great Soviet Encyclopedia, TSB. 2012

Accelerator

Accelerator is an indicator of changes in the required volume of investment when consumer demand for products changes.

Multipliers and accelerators are used in the analysis of - economic cycles; and - the role of capital investment in the uneven development of the economy.

Excellent definition

Incomplete definition ↓

Accelerator

lat. accelero acceleration), an economic indicator that is used in government regulation of a market economy. The acceleration coefficient characterizes the change in investment volume caused by an increase or decrease in consumer spending. The essence of the acceleration principle is to identify the relationship between the demand for means of production and the demand for consumer goods, in which the demand for means of production grows faster than for consumer goods.

Excellent definition

Incomplete definition ↓

ACCELERATOR

1) an indicator used in government regulation of a market economy. The acceleration principle assumes that increases or decreases in consumer spending cause changes in capital accumulation; 2) an equation establishing the dependence of an endogenous variable on the growth (rate of change) of an exogenous variable. Used in dynamic macroeconomic models to reflect the dependence of capital investments on changes in the final product. The concept was proposed by J.M. Keynes.

Excellent definition

Incomplete definition ↓

Accelerator

an indicator used in government regulation of a market economy. The acceleration principle assumes that increases or decreases in consumer spending cause changes in capital accumulation. For example, a significant increase in consumer demand for goods may result in an increase in production capacity. On the contrary, a significant reduction in consumer spending can reduce manufacturers' profits so much that they will not even be able to replace worn-out equipment, i.e. will cause one or another reduction in investment. The acceleration coefficient (accelerator) characterizes the change in the volume of investments caused by an increase or decrease in consumer spending. In the practice of regulating the Russian economy, the principle of acceleration is not yet actually implemented.

Excellent definition

Incomplete definition ↓

ACCELERATOR

(accelerator) An indicator that establishes the dependence of the volume of investment (investment) on changes in the volume of output (output). The accelerator model states that firms invest more when output increases and less when output decreases. This assumption seems reasonable: an increase in demand encourages some firms to produce more and gives them and other firms the hope that demand will continue to increase. An increase in output raises the relationship between output and capacity, and the expectation of a further increase in demand causes firms to assume that they will benefit from holding additional capital equipment. Accelerator-type models help empirically explain both fluctuations in fixed investment and changes in investment in inventories and work in progress.

Excellent definition

Incomplete definition ↓

ACCELERATOR

English accelerator) – 1) in the most general sense, the term of economic cybernetics: such a link in the control system (“differentiating link”) in which the output value is proportional to the rate of change of the input value, i.e. y = k(dx/dt); 2) in the theory of economic growth - an indicator characterizing the relationship between the increase in national income (or final product) and the volume of capital investment and reflecting the so-called. effect of increasing development (acceleration); 3) the same interpretation of this concept in the works of representatives of neo-Keynesianism - as an indicator reflecting only one side of this relationship: the influence of the expected or required growth of national income (product volume or demand for these products) on the size of capital investments induced (caused) by it. It is the latter interpretation that is most common in Western countries. economical lit-re. The meaning of the “acceleration effect” is the greater the share of national income allocated for capital investment, the faster the national economy itself grows. income, the larger share of it can be allocated to new capital investments, etc. Coefficient k (power or factor A.) is obtained by dividing the amount of capital investment K in a given year by the increase in national income. income (final product) in the previous year (in other words, this is the amount of capital investments associated with an increase in a unit of income): The inequality k>1 is usually true, since the cost of means of production is always significantly higher than the cost of the products they produce during the year. If the absolute volume of capital investment for a given year is known, with the help of A. one can determine the approximate value of the increase in national income. income (or final product) next year: And vice versa, if the goal is to obtain a certain increase in national income (or final product), knowing the coefficient A., determine the required amount of capital investment (i.e., increase in funds): For example, to increase production output next year by 20 million rubles. with an acceleration coefficient of 3, you will have to spend 60 million rubles. capital investments, and with k = 4 – 80 million rubles. These will, however, not be all required investments, but only induced ones. This will not include, for example, the costs of restoring retiring assets and autonomous capital investments (component b). Together with the multiplier, A. puts into the hands of the researcher important tools for building dynamic. economic models. In particular, the interaction between A. and the multiplier is the basis of the economic model. Harrod–Domar growth. In relation to dept. For a company, econometrics interprets the acceleration coefficient k as an optimal indicator of the capital intensity of changes in the scale of economic activity. activities (for example, expanding the production of certain products). It can be either constant or variable - when, with the growth of production, the level of its economic efficiency also changes (economy of scale, effect of changes in production technology). In addition to the described model of simple architecture, which takes into account only the relationship between the growth of results (income or output) and the capital investments necessary for it or caused by it, there is a flexible architecture - a model that takes into account, in particular, complementary growth. circumstances (for example, the possibility of production growth without capital investment, if there are idle capacities, fluctuations in the level of production, etc.), as well as A. with a lag - a model that takes into account the lag of the actual. the rate of investment growth in relation to the growth of production results (income), which causes them.

How does an accelerator work in economics? Multiplier and accelerator: concept and role in economic science. Boost in the economy

See what “Accelerator (in economics)” is in other dictionaries:

Multiplier in economics and its types

Definition and economic essence of an accelerator

See also interpretations, synonyms, meanings of the word and what an ACCELERATOR (IN ECONOMY) is in Russian in dictionaries, encyclopedias and reference books:

Accelerator

Accelerator

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Accelerator

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