Using Output and Labour Multipliers to Target Incentives for Fast Economic Recovery: The Cases of Ethiopia and Kenya

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Date
2022
Authors
Max, Mendez-Parra
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African Economic Research Consortium
Abstract
This paper provides an initial approach on the use of input-output tables to calculate output and labour multipliers. It uses the Ethiopia and Kenya country case studies to illustrate the procedure.The output and labour multipliers are helpful to understand the backward linkages and the economy-wide employment generation of specific sectors. The multipliers indicate the capability of a demand-induced shock to generate output and employment directly and indirectly. In this way, it is possible to determine the sectors that, through stimulus of different nature, can deliver the maximum effect on economic recovery.
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