What is it about?
This study explores the profound implications of remote work on local economies, focusing on the operation of the multiplier effect within a country's economic framework. The multiplier effect is a fundamental economic principle that elucidates how changes in expenditure and investment can trigger a ripple effect, magnifying their influence on an economy. In the context of remote work, this concept gains heightened relevance as it sets in motion a cascade of economic activities originating from remote employees and radiating to their local communities.
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Why is it important?
The multiplier effect, a cornerstone of economics, underscores how alterations in expenditure can trigger substantial repercussions in a country's economy through a cascade of economic operations, offering lasting influence rather than a transient effect, although it can also operate negatively when expenditure decreases, leading to a decline in both economic activity and income.
Perspectives
The magnitude of the multiplier effect is shaped by factors such as the marginal propensity to consume, leakages like savings and taxes, and the extent to which additional spending drives additional production capacity within the economy. A comprehensive understanding of the multiplier effect is invaluable for policymakers, enabling them to assess the potential outcomes of adjustments in fiscal and monetary policies.
Assoc Prof, Dr. Sanmugam Annamalah
SEGi University Kota Damansara
Read the Original
This page is a summary of: The Economic Impact of Remote Work: Unpacking Regional Transformations and Economic Multipliers, Journal of Applied Economic Sciences (JAES), September 2023, SCIRES WEB - RITHA Publishing,
DOI: 10.57017/jaes.v15.3(81).03.
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