cumulative causation

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The economic principle that multiple changes are set in motion by a single event. The causation might be "forward" if the effects are positive, as in the case of the location of a new business generating more jobs, more investment opportunities, and a greater tax base for a community. The causation would be "backward" if a business closed, thereby creating the reverse effects of the opening of a new business. The chain reaction associated with cumulative causation is said to be created by the multiplier effect.

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