THE REGIONAL MULTIPLIER EFFECT AS A LOCAL ECONOMIC DEVELOPMENT INDICATOR

Lots of knowledge and historical experience in regional policy constantly bring new impulses to explore different regions, entities, institutions and individuals. Especially mutual comparison leads to the desire for new possibilities and methods of analysis or modeling. The purpose of this paper is to approach one of the methods that can be sorted into groups that is still not explored enough, but still has many supporters and opponents. This contribution highlights the role of multiplier effects in the regional and local economies, both from the theoretical and the practical perspective. It briefly presents several methods, including the multiplier effect, and their usage in practice. The method of the "local multiplier" is explored more in detail and the paper shows its possible use in everyday life. This method is quite new and there do not exist many studies about it at the moment. It was created to help both public and private organizations and individuals to evaluate the impact of their expenditures on the local economy. Local multiplier observes the money trail and its flow after it is spent by local organization or individual. Maintaining the money flow is important especially for small open economies to strengthen their self-sufficiency. Despite all the pitfalls of the local multiplier method, that are represented mainly by obtaining and identifying required data and accurate information, the contribution tries to show possible use in practice. At the same time it is trying to answer the question whether the right "value multiplier" can be considered as one of the support criterions when deciding on issues of regional policy.