Local companies example of how money spreads throughout the Montana economy

It’s a phenomenon known as the economic multiplier effect. The multiplier, or ripple effect, occurs when an industry or business brings money from outside a given community into that community, said Paul Polzin, director emeritus of the University of Montana’s Bureau of Business and Economic Research.

It can be through a business selling its products out of state and spending that money in the community — through buying a home or going out to a restaurant — or a tourist coming through town and staying several days while visiting Big Sky or Yellowstone National Park.

For example, Polzin explained if a new business that sells products out of state hires 10 new employees, it generally results in another 10 jobs somewhere else, whether in professional services, construction or jobs for businesses like the Arnolds’ home maintenance companies.

"Yeah, it’s pretty important," Polzin said. "That’s the way the business cycle is transferred to the local economy."

Jason Bacaj, Chronicle Staff Writer

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