What if anything do estimated economic multipliers really mean? What are some basic principles policymakers should use when thinking about the prospective impact of new projects in their communities?…
…Our biggest recommendation for economic development officials is to not rely upon economic multiplier estimates to assess economic impact. Instead, in considering prospective projects, we urge a focus on questions such as:
– What would affected workers be doing absent the project?
– Might the project imbue workers with skills that could be useful to other employers or in setting up separate businesses?
The most favorable prospective projects would employ workers who would otherwise be unemployed or underemployed, plus would result in growth in employment beyond the originating project.