16 November 2014
This work develops two alternative approaches to modeling the effects of governmental spending onto national production and well-being. These effects are proposed to be measured by means of corresponding multipliers. The first approach, more traditionally, is based on systems dynamics and input-output tables, while the second approach is based on agent-based modeling. Both approaches are applied to the case-study of Finland. We find that the stimulating production may be more efficient in terms of both increment of output and households’ income than social transfers, but it depends on how complex the economic ties are within the national economy (i.e., how large the share of intermediate goods is). This study was supported by the Ministry of Employment and Economy of Finland.
Last edited: 28 November 2014
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