ABSTRACT
This chapter presents an alternative empirical dynamic analysis using the multiplier methodology. It introduces the basic concepts and foundations of the multiplier methodology, and presents the empirical findings provided by the impact, interim and total multipliers. Each of the structural equations in the model have served to describe part of the structure of the economy. The coefficients of the structural equations have provided tests on qualitative and quantitative prepositions of economic theory. Economic analysis ought to be grounded not merely upon partial, structural direct relationships but upon total, indirect relationships as well. The endogenous variables may be traced back to more basic determinants, i.e. they may be found explicitly in terms of predetermined variables alone by the derivation of the model into what is known as the set of reduced forms- much favoured for analytical purposes. Impact multipliers express that part of the response of endogenous variables to changes of predetermined variables which occurs in the first year.
