Marginal Propensity To Import - MPM

The marginal propensity to import (MPM) is a measure of the change in imports as a result of the change in a nation’s disposable income (which just means post-taxes and transfers...so what you think of as your income, probably). It's just like the marginal propensity to consume and the marginal propensity to save, except we’re focusing on the rise or fall of imports from far away (or not-so-far-away) lands.

If a country has a $1 increase of income that leads to a $0.10 increase in imports, you’re looking at a bonafide 0.1 MPM, similar to the other marginal propensity siblings.

In particular, MPM is likely to have at least the same sign (positive or negative) as the marginal propensity to consume, since more income often means more spending...and spending at least some on imported goods. If a country’s MPM takes a sharp drop, that decrease in imported goods has a ripple-effect outward into other foreign economies.