Multiplier uncertainty

Multiplier uncertainty refers to the variability and uncertainty associated with the economic multiplier effect, which is the idea that an initial change in spending (such as government investment or consumer spending) will lead to a larger overall impact on the economy. The multiplier effect can amplify the effects of fiscal policy, investment, or other economic activities; for example, government spending can lead to increased income for businesses and households, which in turn can foster further spending, creating a chain reaction of economic activity.