The Local Economic Multiplier Effect

Feb. 22, 2016

Local Economic Multiplier from Terry Garrett on Vimeo.


More than one dozen studies over the past decade show locally-owned independent restaurants re-spend twice as much per dollar of revenue in our local economy than chain restaurants.

The Local Economic Multiplier Effect is a very valuable feature of our economies. The term refers to how many times dollars are recirculated within a local economy before leaving through the purchase of an import. Famed economist John Maynard Keynes first coined the term "Local Multiplier Effect" in his 1936 book The General Theory of Employment, Interest and Money.

















And independent retailers re-spend more than three times as much of each sales dollar locally compared to their chain competitors.

That adds up to a huge difference in creating local jobs and local wealth.