Multiplier uncertainty is lack of perfect knowledge with the multiplier effect of any particular policy activity, such as any monetary or budgetary policy change, upon the intended target with the policy. For example, a fiscal policy maker might have a prediction regarding value of this fiscal multiplier—the ratio with the effect of any government spending change on GDP to the dimensions of the government spending change—but isn’t likely to know the complete value of this ratio.
Multiplier Uncertainty
