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The exogenous consumption impulse of foreign visitors and Australians
visiting Sydney was limited to the short period of the Games. Due to manifold
multiplying links of the Keynesian economic cycle, their demand will generate a
noticeable additional demand in the following years. This can be illustrated by
the capital expenditures, which generated a positive effect years before the
Games. The positive image effect of Sydney 2000 will foster tourism in the years
after the Games and, therefore, have the effect of generating new autonomous
expenditures.
The use of a general multiplier (Figure 3) is not as good as a complex
input-output model (see Ahlert 2001). However, the multiplier is fine to
demonstrate the economic effect of the Games in general. The total construction
expenditure of 75 major projects was around AUS$ 3.5b of which a little over
30% was privately funded (Andersen 1999: 10; The Audit Office 1999: 73).
However, some of the expenditures in Figure 3 could be excluded because
they were considered not to have arisen primarily from Sydney's winning the bid.
This is a very critical point. Calculating the Olympic-related economic impact
the decision has to be made about what is Olympic-related and what is base case
(Preuss 2000: 199).
Figure 3: Sydney's Olympic capital expenditure and effect of the multiplier.
Sources: data from Andersen (1999: 11), for calculations see Preuss (2000: 282).
Figure 3 shows the economic effect only of capital expenditures in Sydney.
To display the total impact, both the organisational expenditures of SOCOG and
the consumption expenditures of non-Sydney Olympic visitors have to be added.
That would strongly increase the above shown results from 2000-2004.
The strength of the impulse depends on the economic situation during the
main time of investments. In a boom the additional "Olympic" demand leads to
crowding out effects, while the demand is good during an upcoming recession.
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