Tuesday, May 31, 2011

The Multiplier

What is interesting to me about this "bright" from the NYT is how surprised the locals are about the money that's reinvigorating the local economy.

This is no great surprise to me, and we might have some of this money in Maine too, were we prepared to think a little harder about our energy choices. The way I learned economics (in the Pacific Northwest at that) was that one successful local enterprise would foster another and another, through the power of economic multipliers.

To be sure, I studied with Tom Power at the University of Montana, who made a point of using multiplier theory in his work in the regional economy.

But I thought most people understood the idea.

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