Showing papers in "Economic Systems Research in 2000"
TL;DR: In this article, the authors examined the phenomenon that several of the determinants are not independent and proposed an alternative to overcome this problem and the findings are illustrated by an empirical study for The Netherlands 1972-1986.
Abstract: Structural decomposition techniques are used to break down the changes in one variable into the changes in its determinants. Typically, these determinants are assumed to be independent. Using the decomposition of value added growth as a prototype example, this paper examines the phenomenon that several of the determinants are not independent. The determinants are termed fully dependent if changes in one determinant cannot occur without corresponding changes in another determinant. In most empirical cases, full dependence exists between groups of determinants, not between separate determinants. It is indicated that dependencies may cause a bias in the results of decomposition analyses. An alternative to overcome this problem is proposed and the findings are illustrated by an empirical study for The Netherlands 1972-1986.
135 citations
TL;DR: In this paper, a theoretical framework for the Rasmussen-Hirschman key sector analysis based on a minimum information approach is proposed. But the analysis is restricted to Chinese input-output tables for 1987 and 1990.
Abstract: This paper provides a theoretical framework for the Rasmussen-Hirschman key sector analysis based on a minimum information approach. This approach introduces a separation of information about regional economic structure into two parts. In the first part, knowledge about economic structure, extracted on the basis of minimum information included in the row and column multipliers, is extracted from the Leontief inverse matrix. The second part presents the specifics of synergetic interactions between different sectors of the economy. A corresponding intensity matrix represents the strength of the fields of influence of simultaneous multiple changes. From this formulation, a minimum information decomposition of the Leontief inverse is shown to exist and applied to Chinese input-output tables for 1987 and 1990.
109 citations
TL;DR: In this paper, the authors discuss the roots of input-output analysis in 'classical' economics and argue that it is akin to the classical approach to the theory of production, distribution and relative prices in that it requires all magnitudes to be observable and starts essentially from the same set of data.
Abstract: This paper discusses the roots of input-output analysis in 'classical' economics. The authors considered include Petty and Cantillon; Quesnay, the physiocrats and their critic Isnard; Smith, Ricardo, Torrens and Dmitriev; Marx, von Bortkiewicz and von Charasoff; Leontief; and Remak. It is argued that, in terms of method and content, input-output analysis is akin to the classical approach to the theory of production, distribution and relative prices in that (i) it requires all magnitudes to be observable and (ii) starts essentially from the same set of data. It is shown that many important modern concepts have been anticipated by the earlier authors. The prehistory of input-output analysis is also meant to provide new perspectives on potential future developments of the field.
98 citations
TL;DR: In this article, an input-output decomposition method is used to decompose the change in industrial energy consumption for Denmark into six components, of which three are trade-related.
Abstract: This paper examines the relation between trade patterns and energy consumption in manufacturing industries. An input-output decomposition method is used to decompose the change in industrial energy consumption for Denmark into six components, of which three are trade-related. Trade-induced changes in energy consumption have important implications for issues such as international distribution and regulation of energy consumption and emissions. It is shown that a structural change in foreign trade patterns can increase domestic energy demand. This is contrary, however, to what might be expected for a small industrialized country, which is presumed to export products that intensively use inputs of skilled manpower as well as research and development. Finally, calculations carried out at different levels of aggregation are compared. The findings here demonstrate the importance of large variations in energy intensities among subsectors for the calculation results.
97 citations
TL;DR: It is shown that the input and output matrices as well as the Leontief inverse can be generalised to include timing properties for the inputs by means of the Laplace transform.
Abstract: Input-Output Analysis, together with the Laplace transform, have been applied to multi-level, multi-period production-inventory systems in a number of papers. This article gives a historical overview of the areas involved in these studies. It is shown that the input and output matrices as well as the Leontief inverse can be generalised to include timing properties for the inputs by means of the Laplace transform. The consequent advantages are exemplified in different production models, treating, for instance, capacity requirements and safety stock problems. The main literature in this field concerns assembly systems, but the approach is easily applicable to process industries with a divergent material flow or when feedback is essential.
87 citations
TL;DR: In this paper, the authors present new econometric evidence on the relationship between total factor productivity growth and the R&D expenditures of Canadian manufacturing industries in the presence of inter-industry and international spillovers of technology.
Abstract: The paper presents new econometric evidence on the relationship between total factor productivity growth and the R&D expenditures of Canadian manufacturing industries in the presence of interindustry and international spillovers of technology. In contrast to studies that presume that international spillovers are incorporated in imports of intermediate and/or capital equipment goods, the present paper assumes that the principal channel of transmission of new technology is foreign direct investment. Three original proxies for international spillovers use information on patenting, the size and the origin of foreign ownership in the host country and the R&D expenditures in the country of origin. The results suggest that the nexus between industry's own R&D expenditures and the TFP growth is significant and positive, especially for the process-related R&D. Domestic interindustry spillovers of new technology have a larger effect on TFP than industry's own R&D expenditures. All three proxies for international te...
76 citations
TL;DR: In this article, a framework for estimating the entries of a social accounting matrix (SAM), or any large matrix of expenditures, trade or income flows, is developed given aggregated data, and the contribution of structural and supply-side information, as well as policy variables, within the generalized context of a non-stationary SAM.
Abstract: Given aggregated data, a framework for estimating the entries of a social accounting matrix (SAM), or any large matrix of expenditures, trade or income flows, is developed. Under this framework it is possible to evaluate the contribution of structural and supply-side information, as well as policy variables, within the generalized context of a non-stationary SAM. Inference and diagnostic properties are developed as well. This new estimator can be viewed as a generalized maximum likelihood estimator. Stationary and non-stationary estimates of the US SAM for the years 1987-1994 together with the effects of supply-side variables are analyzed.
61 citations
TL;DR: In this article, it is shown that the normal evaluation methods that ignore input-output considerations probably overestimate by 20 to 60% the net energy yield of projects designed to save energy.
Abstract: Wassily Leontief's input-output analysis is often interpreted simply as a logical next step in the chain of ideas from Quesnay to Marx to von Bortkiewicz, the last of these having been Leontief's thesis adviser in Berlin. Here, it is shown that input-output is far more than that. Unlike any predecessor, it is a flexible model with widely varied applications that permits direct empirical evaluation. This is illustrated by application to net energy calculations, showing that the normal evaluation methods that ignore input-output considerations probably overestimate by 20 to 60% the net energy yield of projects designed to save energy.
58 citations
TL;DR: This paper presents and evaluates a way of making product-to-product tables from Use and Make matrices that are of immediate relevance to any statistical office that makes input-output tables.
Abstract: This paper presents and evaluates a way of making product-to-product tables from Use and Make matrices that are of immediate relevance to any statistical office that makes input-output tables. Two ways of making a product-to-product table are in common practice: one based on the product-technology assumption and the other on the industry-technology assumption. The industry-technology assumption is recognized as highly implausible but is often used because the product-technology assumption frequently leads to small negative flows which make no economic sense. This paper shows how a slight adjustment in the product-technology assumption leads to an algorithm that is certain to avoid negative flows yet keeps close to the spirit of the product-technology idea. Some details of the application of this method to the USA table for 1992 are reported. Similar applications to every American table since 1958 have given consistently sensible results. A computer program for the method is available.
52 citations
TL;DR: In this paper, the authors focus on the decomposition of structural change into changes in interregional trade and in technology, in order to investigate the nature of the structural change over time and across sectors.
Abstract: An earlier analysis (Hewings et al., 1998) revealed the 'hollowing-out' process, a decrease in the level of intraregional intermediation, in the Chicago economy during the period 1975-2011. The main force underlying this structural change has been the change in regional trade patterns in a way that interregional trades across economies has replaced the local purchases of intermediate inputs. The issue addressed in this paper focuses on the decomposition of structural change into changes in interregional trade and in technology, in order to investigate the nature of structural change over time and across sectors. The empirical realization is provided by reference to a series of regional input-output tables for a nine-region division of the Japanese economy (1980-1985-1990). The results revealed that interregional trade has played a key role in determining regional output level while technology itself had a tendency to decrease further.
46 citations
TL;DR: In this paper, the authors present a quantitatively based method for comparing the structure of National Systems of Innovation (NSI), focusing on technological interdependencies at the industrial level in Germany, Japan, United Kingdom and the United States.
Abstract: This paper presents a quantitatively based method for comparing the structure of National Systems of Innovation (NSI). The emphasis is on technological interdependencies at the industrial level in Germany, Japan, the United Kingdom and the United States. The mapping of the interdependencies, based on input-output tables, builds on a graph theoretical model (a minimal flow analysis). R&D expenses are used as the technology indicator. The NSI framework is taken as the point of departure. It is claimed that 'history matters', through relating historical descriptions and analyses of industrialization processes to the findings of structural analyses of R&D interdependencies within the NSIs. The paper shows that the national systems tend to cluster in two main 'bulks'. One is centred around industrial chemicals and/or pharmaceuticals, and the other is centred around communication equipment, electronics etc. In most cases these clusters do not appear to be closely technologically related through embodied R&D flo...
TL;DR: In this paper, a weighted mean of these yields an index of aggregate productivity suitable for measuring social welfare, which coincides with the inverse of the maximum eigenvalue of the'socio-technical matrix'.
Abstract: There are many ways to measure productivity. The choice will depend on the suitability of each index to the main purpose the researcher has in mind. Whenever we are interested in 'competitiveness', the proper measure will be the inverse of the total labour embodied in one unit of final product; or, what amounts to the same, the labour employed in the vertically integrated sector corresponding to each final good. A weighted mean of these yields an index of aggregate productivity suitable for measuring social welfare. Another index of aggregate productivity (this one related to the profit rate and potential growth) coincides with the inverse of the maximum eigenvalue of the 'socio-technical matrix'. These indices are computed for the Spanish economy and compared with more conventional ones.
TL;DR: In this paper, a proposal is made to nest social and environmental indicators into an existing economic accounting framework, taking the Social Accounting Matrix (SAM) as a basis, because of its flexibility regarding extensions with non-monetary data addressing social and environment concerns.
Abstract: Extending economic accounts with sets of social and environmental indicators is a first step towards a more integrated analysis of aspects of sustainability problems. In this article, therefore, a proposal is made to nest social and environmental indicators into an existing economic accounting framework. The Social Accounting Matrix (SAM) is taken as a basis, because of its flexibility regarding extensions with non-monetary data addressing social and environmental concerns. The main thrust of the paper is methodological. From the discussion of methodological issues and the application to the SAM for Bolivia for the year 1989, it is concluded that it is, in principle, feasible and relatively simple to extend the SAM with the two sets of indicators. However, additional data will have to be collected to be able to address, more adequately, the problems of sustainability.
TL;DR: Using a Biproportional filter, the authors measured and analyzed structural change that has taken place in the Chinese manufacturing sector since 1985, highlighting those industries that have been most responsible for the change and explaining the reasons for these changes.
Abstract: Traditional IO techniques have been used and applied in detail to the case of the Chinese economy with a view to describing and analysing the gradual, albeit radical, transformation of the Chinese industrial fabric since the beginning of the economic reforms. Using a Biproportional Filter, our study has a threefold objective: to measure and analyse structural change that has taken place in the Chinese manufacturing sector since 1985; to highlight those industries that have been most responsible for the change; and to explain the reasons for these changes.
TL;DR: In this paper, the authors show how the pattern of an inter-industry R&D flow system can be detected using a Subsystem-MFA (SMFA), which shows the innovation spillovers of the relevant innovative sectors of a country, which are then turned into graphical form so that the sector clustering into this system can display like a'molecule' of sectors.
Abstract: This paper shows how the pattern of an interindustry R&D flow system can be detected using a Subsystem-MFA (SMFA). The standard subsystem analysis shows the innovation spillovers of the relevant innovative sectors of a country, which are then turned into graphical form so that the sector clustering into this system can be displayed like a 'molecule' of sectors. The analysis uses the recently published input-output tables of the OECD for Germany, Japan and the United States for the beginning, the middle and the end of the 1980s. The analysis uses R&D-expenditures as an innovation-indicatorvector, published also by the OECD. The results show that there are specific patterns of interindustry imputed R&D flows that differ to some extent between the given countries. These differences can be interpreted as being due to the specific economic history of these countries.
TL;DR: In this paper, the authors show that the dynamic Leontief model can be interpreted as a linear model of endogenous growth and that the long-term rate of growth is determined within the economic system -either as the outcome of the saving and investment behaviour of agents or as the result of some planner's maximization of some objective function.
Abstract: This paper shows that the dynamic Leontief model can be interpreted as a linear model of endogenous growth. The long-term rate of growth is determined within the economic system - either as the outcome of the saving and investment behaviour of agents or as the outcome of some planner's maximization of some objective function.
TL;DR: In this article, the authors analyzed both sectoral intermediate inputs and the value added by using 45 inputoutput tables to discover a standard pattern of the changes in the input-output coefficients as an economy develops.
Abstract: Empirical sectoral analyses of a standard development pattern have focused upon changes in the value added, disregarding the structural changes in intermediate input. In a more comprehensive approach to the production function, the present paper analyses both sectoral intermediate inputs and the value added by using 45 input-output tables to discover a standard pattern of the changes in the input-output coefficients as an economy develops. The major findings are first a U-shape pattern of the average value added ratio and, conversely, an inverse U-shape pattern of the average intermediate input ratio. Secondly, as compared with principal input coefficients that are broadly stable, supplementary input coefficients exhibit the non-linear trends of an inverse U shape contributed by a rising trend in agriculture in the early stages, and a growing energy cost in most sectors, although this is partly offset by mild U shapes of transport and distribution costs. A similar inverse U-shape pattern is implied for th...
TL;DR: In this paper, the authors examined both the economic impact of the restoration itself and those pieces that are missing from the official project analysis; namely, increased tourism, urban construction, in-migration, and changing agricultural patterns.
Abstract: The largest ecosystem restoration in the world-a $7.8 billion rescue package-is now beginning in the Florida Everglades. This paper examines both the economic impact of the restoration itself and those pieces that are 'missing' from the official project analysis; namely, increased tourism, urban construction, in-migration, and changing agricultural patterns. These pieces comprise a variety of scenarios that are tested for a 45 year planning period with an augmented input-output model derived from a regional SAM. The new output and employment generated by the 'missing pieces', which are small relative to the vast economic base of the region, do represent a considerable increase over the annual growth, especially by the year 2045. We conclude with a discussion of ways in which a growing regional economy might be reconciled with ecosystem restoration.
TL;DR: It is demonstrated that the point-input point-output representation of processes used in von Neumann-Sraffa models is not restrictive and can be derived from general flow-input flow-output processes.
Abstract: This paper compares alternative concepts of production and prices with a special emphasis on time. First, it is demonstrated that the point-input point-output representation of processes used in von Neumann-Sraffa models is not restrictive and can be derived from general flow-input flow-output processes. Second, the concept of long-period positions, which can be traced back to the work of the classical authors, is discussed. Third, the von Neumann-Sraffa approach is compared with the neo-Austrian model and the flow-fund model developed by Hicks and Georgescu-Roegen respectively. It turns out that these latter two models are, at best, a special case of the former. Finally, some problems and intricacies concerning observable input-output coefficients are discussed and, as an alternative, a possibly applicable method to determine coefficients for general flow-input flow-output processes is presented.
TL;DR: In this article, a set of coefficients from the 1966 input-output table of the former Soviet Union were selected and exogenously determined, and the remaining coefficients were updated to 1972 by means of naive, RAS, and Lagrangian techniques.
Abstract: Input-output (IO) updating research indicates substantial improvements in the forecasts when some of the coefficients have been exogenously estimated and included in the updating process. Several methods for identifying the appropriate subsets have been proposed. The present paper attempts to assess the relative performances of two such approaches: 'the largest coefficients' and 'the most important parameters' criteria. Utilizing these criteria, a set of coefficients from the 1966 IO table of the former Soviet Union were selected and exogenously determined. The remaining coefficients were updated to 1972 by means of naive, RAS, and Lagrangian techniques. Comparison of the results with the 1972 benchmark table provided the desired answers.
TL;DR: A critical assessment of Alfred Kahler's pioneering contribution to the analysis of the impact of automation on workers in his 1932 dissertation thesis Die Theorie der Arbeiterfreisetzung durch die Maschine (The theory of the displacement of the worker by the machine) is given in this paper.
Abstract: This paper provides a critical assessment of Alfred Kahler's pioneering contribution to the analysis of the impact of automation on workers in his 1932 dissertation thesis Die Theorie der Arbeiterfreisetzung durch die Maschine (The theory of the displacement of the worker by the machine). Kahler's analysis is shown to be an elaboration on Ricardo's and Marx's approach to the analysis of the labour displacement and compensation process. It is also shown that the arithmetical 'circulation schemes' developed by Kahler can be interpreted as an early formulation of a closed (static) input-output model. In addition, the paper also examines Kahler's rudimentary discussion of the associated price model and of the choice of technique problem.
TL;DR: In this article, the value-added vector is considered as a fairly simple, straightforward component of input-output studies, but modern 'classical' economics tells us that it is far from simple.
Abstract: Whilst input-output analysts often treat the value-added vector as a fairly simple, straightforward component of input-output studies, modern 'classical' economics tells us that it is far from simple. This will be developed, both for a closed economy and for an economy using foreign produced inputs.
TL;DR: In this article, the integration of pollution abatement techniques for NO x emissions into the environmentally enlarged input-output model PANTA RHEI II for West Germany is discussed.
Abstract: This paper concentrates on the integration of pollution abatement techniques for NO x emissions into the environmentally enlarged input-output model PANTA RHEI II for West Germany. The use of available abatement technologies is explained by emission prices, investment and technological factors for different sectors and energy carriers. Simulation runs to the year 2005 show the economic, environmental and technological effects of a tax on NO x emissions, when revenues are recycled via reductions of employers' social security contributions. A cut of emissions by almost one third against the businessas-usual level is reached. In particular, the use of advanced pollution abatement techniques and structural changes prevent negative economic effects on the macro level. Lower real wages even induce higher employment.
TL;DR: In this article, the authors model the circulation of money as a Markov chain and investigate a special multiplier that describes the enlivening course of new money, or the propagation of a monetary injection into a given economy.
Abstract: After modelling the circulation of money as a Markov chain, a special multiplier is set up, explained and investigated. It describes, in mathematical terms, the enlivening course of new money, or the propagation of a monetary injection into a given economy, which David Hume inspected in his famous essay. Some explanation is given to why he considered it, justly, as a transitory phenomenon.
TL;DR: In this article, the authors used regional input-output tables to analyse the long-term impact resulting from the implementation of newly irrigated areas provided for under the terms of the Ebro Basin Hydrological Plan.
Abstract: This paper uses regional input-output tables to analyse the long-term impact resulting from the implementation of the newly irrigated areas provided for under the terms of the Ebro Basin Hydrological Plan. We have described the whole process by way of two consecutive stages. In the first, where the final demand is fixed, we use a demand-driven input-output model and we incorporate technical change through the reduction of the coefficients. In the second, the output of all sectors increases, with the increases in the vector of output being proportional to the forward linkages vector of the Agriculture sector. In this stage, our objective is to obtain a final demand vector that ensures that the agricultural value added increases to a prescribed value of v 1 *. Whilst the results demonstrate the positive effects of the transformation, they also reveal effects of a very different character in each sector. Thus, the Agriculture, Livestock and Agri-food industry sectors show significant increases in their gross...
TL;DR: In this paper, a general solution is proposed to the problem of modelling the rents in an input-output context, where the physiocratic view is a special case that identifies productivity with only one sector.
Abstract: A number of efforts have been made so far to transcribe Francois Quesnay’s Tableau Economique into a modern input± output framework. However, the transcriptions available at present have not been generally accepted. A point of serious discussion has been the fixed coefficients assumption, which dates back to the model proposed by Phillips in 1955. Especially regarding the analysis of rents formation and proprietors preferences, this assumption is at odds with basic physiocratic thought. In this paper a general solution is proposed to the problem of modelling the rents in an input± output context. The method suggests a general approach, where the physiocratic view is a special case that identifies productivity with only one sector.
TL;DR: In this paper, a special session devoted to the theme ''What can input output learn from classical economics?'' was held at the Twelfth International Conference on Input± Output Techniques.
Abstract: Input± output analysis has its roots in classical political economy, that is, the writings of William Petty, Richard Cantillon, FrancË ois Quesnay and the physiocrats, and the English classical economists from Adam Smith to David Ricardo. This has repeatedly been stressed by Wassily Leontief, whose main concern was the empirical implementation of the old classical view of the economy as a circular ̄ ow. The classical approach to the theory of production, value and distribution has been revived more recently by Piero SraVa whose 1960 book Production of Commodities by Means of Commodities has triggered a rich literature on conceptual, theoretical and doctrinal aspects of analyses dealing with economic systems characterized by a sophisticated division of labour and complex interrelationships in production. At the Twelfth International Conference on Input± Output Techniques, held in New York, 18± 22 May 1998, a special session, organized by one of the guest editors of this issue, was devoted to the theme `What can input output learn from `̀ classical’ ’ economics?’ . The idea was to take stock of the recent developments in the theory of production, distribution and growth, trace the basic ideas entertained back in the history of economic thought, and relate modern classical theory to input± output analysis. In this way, the ground was meant to be laid for a fruitful communication between input± output analysts and advocates of the classical approach, with the potential of a cross-fertilization of their respective ideas. The present volume contains the revised versions of the papers presented in the special session plus William J. Baumol’s address delivered to the meeting of the International Input± Output Association. Baumol’s paper ® ts neatly into the general format of the special session. We are grateful to Professor Baumol for having allowed us to include his piece in this volume. The composition of this issue is the following. William J. Baumol deals with the characteristic feature of Leontief ’s analysis, which distinguishes it from the contributions of Quesnay, Marx and von Bortkiewicz; namely, Leontief ’s transformation of a purely theoretical analysis into an economic tool that can be used in empirical work and serve as the basis for economic policy. Heinz D. Kurz & Neri Salvadori show that input± output analysis can look back at a formidable history prior to its proper inception. The historical view provides some new vistas on the potentialities of input± output analysis. It is argued that many of the problems that ® gured prominently in the work of earlier authors, but which for practical reasons are set aside in conventional input± output, can be addressed with the help of the sophisticated