A ripple effect occurs when an initial disturbance to a system propagates
outward to disturb an increasingly larger portion of the system, like ripples
expanding across the water when an object is dropped into it.
The ripple effect is often used colloquially to mean a multiplier in
macroeconomics. For example, an individual's reduction in spending reduces the
incomes of others and their ability to spend. In a broader global context,
research has shown how monetary policy decisions, especially by major
economies like the US, can create ripple effects impacting economies
worldwide, emphasizing the interconnectedness of today's global economy.