1. Super Multiplier
Alok Jung Joshi

2. Introduction
• Developed by Sir John Richard Hicks(19041989)
• First published in his book “A Contribution to
the Theory of Trade Cycle” (1950)
• Mathematical derivation of the interaction of
multiplier and accelerator

3. Why Super Multiplier?
• Ignored the induced increase in the aggregate
investment outlay
• Simple multiplier was based on the Great
Depression of thirties

4. Concept of Super Multiplier
• Mathematical derivation of the interaction of
multiplier and accelerator
• It explains the combine effect of multiplier and
accelerator on equilibrium income, output and
employment.
• Due to the inclusion of induced investment demand ,
super multiplier will be greater than simple multiplier
• According to Super multiplier , the total income in the
economy will increase by KS times the initial increase
in the autonomous investment.

5. Mathematically, it is expressed as,
where,
ΔY = change in income
ΔIa = change in autonomous investment
Ks = Super multiplier

6. Derivation of the equation

7. Y
S1
I1
E3
I
I
E2
I’a
E1
I
Ia
S
O
X
Y1
Y2
Y3
Output