Multiplier Effect

Etymology

The concept was introduced by economist Richard Kahn in 1931 and became central to John Maynard Keynes’s “General Theory” (1936). “Multiplier” is from Latin “multiplicare,” to multiply — each round of spending multiplies the initial outlay’s impact.

noun phrase · /MUL-tuh-ply-er ih-FEKT/
The way an initial injection of spending ripples through an economy, generating a total increase in income larger than the original amount.
What it names
A handle for why a dollar of stimulus can be worth more than a dollar — as it gets re-spent from hand to hand — and the core argument for and against government spending programs.
Example
Supporters claimed the road project’s multiplier effect would ripple through local diners, suppliers, and shops.
Related idea
Its counterforce is crowding out, where government borrowing raises interest rates and displaces private investment — the debate over the multiplier is largely a debate over how big that offsetting drag really is.