Contributions to Change in the Input-Output Model: The Search for Inverse Important Coefficients

The relationship between changes in input-output structural coefficients and changes in the coefficients of the Leontief inverse is explained in a calculus-based framework. Knowledge of this relationship is essential for understanding how structural changes in one sector are transmitted across the economy, and is useful in forming updates to I-O tables given limited information. Empirically, we identify those coefficients likely to be the most important in causing inverse changes. We find that a selective and systematic updating procedure can lead to accurate updates without the need for complete data.