SUPPLY-SIDE MULTIREGIONAL INPUT-OUTPUT MODELS*

ABSTRACT This paper introduces a new class of supply-side multiregional input-output (MRIO) models and provides the necessary and sufficient conditions on the regional trade matrices that ensure that a generalized supply-side model will be convergent. The paper also introduces a new version of the row coefficient model, conceived as the “mirror image” of the Chenery-Moses demand-side column coefficient MRIO model. Given that the conventional supply-side input-output model has been shown to perform equally as well as the demand side model in forecasting exercises, the supply-side MRIO model is expected to be of value for policy and planning purposes. Moreover, this model is of potential theoretical value for a broad synthesis of demand-side and supply-side MRIO models.     

THE SENSITIVITY OF INPUT-OUTPUT MULTIPLIERS*

The present paper derives analytical expressions for the sensitivity of input-output multipliers to errors in the data. The effects on the simple output multipliers are investigated for additive errors, multiplicative errors in the columns, multiplicative errors in the rows, error rectangles, the error couple and the single error, and price changes. In contrast to earlier investigations, the results are not obtained from the Leontief inverse. The present approach focusses on the effects of errors on the eigenvector corresponding to the dominant eigenvalue. It is indicated how similar expressions may be derived for several other multipliers.     

ADDITIVE-RATIO MEASURES OF INTERACTMTY IN INPUT-OUTPUT SYSTEMS

ABSTRACT. A general axiomatic framework is developed for analyzing alternative measures of interactivity between the sectors of a given activity system (such as the industrial sectors of an economy). Within this overall framework, we analyze an ordinal class of additive-ratio measures which has been applied to a wide variety of systems, including both economic and ecological systems of activities. Our main result is to show that such measures can be characterized by four interactivity axioms. In addition, a wide variety of alternative measures are compared to additive-ratio measures in terms of this axiom system.     

A LONG-RUN INTERPRETATION OF REGIONAL INPUT-OUTPUT ANALYSIS*

ABSTRACT. Regional input-output (I-O) analysis is traditionally motivated by a short-run, extreme Keynesian vision of markets. In this paper we argue that an appropriately formulated, investment-endogenous, I-O system replicates the long-run equilibria of a wide range of regional models, many of which do not operate as I-O systems in the short run. In particular, we use a computable general equilibrium (CGE) framework to illustrate the impact of an aggregate demand disturbance on an I-O and standard neoclassical model. When run forward over a number of periods, the results from the capacity-constrained neoclassical model asymptotically approach the I-O outcome. We use sensitivity analysis to examine the speed of adjustment of the neo-classical system and investigate barriers to the attainment of the I-O result.     

TRANSBOUNDARY INCOME AND EXPENDITURE FLOWS IN REGIONAL INPUT-OUTPUT MODELS*

ABSTRACT. Nearly all regional input-output models have been constructed without a proper accounting of inflows and outflows of personal income and personal consumption expenditures. Typically invoked is a no cross-payments assumption, analogous to the no cross-hauling assumption for commodities. We present a new accounting framework based on the classification of flows according to the location of income generation, receipt, and spending, and argue that only flows endogenous in all three respects should be part of a closed regional I-O model. We use the framework to compute the upward bias in multipliers in a typical regional I-O model. We also present several methods for estimating transboundary flows.     

THE SUPPLY-DRIVEN INPUT-OUTPUT MODEL: A NEW INTERPRETATION BUT STILL IMPLAUSIBLE

ABSTRACT. In this reply, I argue that the production function proposed by Gruver provides a theoretical foundation for the supply model only in a most trivial case. He proposes a more general alternative which is, however, still very implausible. Furthermore, against Rose and Allison, I argue that small input-coefficient changes provide an insufficient excuse for using the supply model for impact studies, and I show that employment estimates may be quite different depending on the approach used.     

A DOUBLE-ENTRY METHOD FOR THE CONSTRUCTION OF BI-REGIONAL INPUT-OUTPUT TABLES*

ABSTRACT. In The Netherlands, a strong tradition in the construction and updating of (inter)regional input-output tables has been built up. The paper gives a brief overview of this Dutch experience and discusses the features of the by now more or less standardized double-entry bi-regional construction method (DEBRIOT). This method systematically adds sales and export coefficients to the usual construction procedures. Thus, it introduces consistency checks at the cell level of the input-output table. Moreover, it offers a non-survey technique to estimate a regional domestic sales table that is crucial to the double-entry character of the method.     

NONSURVEY INPUT-OUTPUT ESTIMATION TECHNIQUES: EVIDENCE ON THE STRUCTURE OF ERRORS

ABSTRACT This paper concerns the nature and extent of error introduced to regional input-output multipliers by errors associated with the estimation of regional purchase coefficients (rpc's). Using the Washington State input-output model and computer simulations, estimates of multiplier error are generated for two distinct sources of rpc error. The results indicate that multiplier error from both rpc sources may be significant and support the findings of previous studies which highlight the importance of error introduced to the household purchases column for multiplier accuracy.