A comparison of alternative methods of updating input-output coefficients

In recent years there has been a growing number of input-output models of economies ranging in scale from the rural to the national. While offering invaluable insights into the interaction of sectors within an economy, the input-output model suffers from the fact that its coefficient values are altered over time due particularly to technological change. Two of the prominent techniques designed to update these technical coefficients, the RAS and linear programming methods, are compared herein with regard to changes in U.S. national coefficients between 1963 and 1967. Suggestions for improvements to the latter method are outlined.     

Qualitative input-output analysis and structural information

The authors first introduce a slightly modified version of the quantitative theory of pull effects. After a short presentation of the basic ideas of qualitative input-output analysis with the aid of matrices, the qualitative goals of ‘completeness’ and ‘velocity’ are defined. The article ends with an investigation of the compatibility of these qualitative goals with the usual quantitative economic goals.     

Regional economic development and environmental repercussions: An environmental input-output approach

This study attempts to examine issues related to the existing adverse relationship between regional economic development and natural environment protection. For doing so, a regional environmental input-output model for the region of central Macedonia in northern Greece is constructed in order to quantify the direct and indirect undesirable negative effects of the production process in the natural environment. The results suggest that there is a considerable trade-off between economic development and environmental deterioration which should be taken into account when policy decisions are made. This paper benefitted from comments by the participants of the Forty-Seventh International Atlantic Economic Conference, Vienna, Austria, March 16–23, 1999.     

An update on Bayesian updating

This paper reports an experiment in which subjects are asked to assess probabilities for unknown events, with treatments that vary the extremity of the prior information. Probabilities are elicited using a Becker–DeGroot–Marshak procedure that does not depend on assumptions about risk aversion. The focus is on the pattern of biases in information processing.     

Trade,structure and linkages in Costa Rica: An input-output approach

Input-output tables for Costa Rica are used first to assess the country's trade performance; it is argued that trade with the rest of Central America has produced a Costa Rican comparative advantage in consumer durables. The paper then uses the input–output tables to examine the economy's structure, which is shown to be block triangular. Finally, measures of linkages are derived from the tables and a critique of the growth-inducing linkage mechanism is presented.     

Price dynamics in an input-output model: An alternative approach

The suggested approach is developed, on the basis of firms' markup behaviour, in terms of current prices making value coefficients change as the effects of the initial price rise spread through the economy.     

Relating the environmental impact of consumption to household expenditures: An input-output analysis

In this paper we evaluate the relationships between household expenditures and the environmental impact categories climate change, acidification, eutrophication and smog formation, by combining household expenditures with environmentally extended input-output analysis. Expenditure elasticities are examined with regression analysis, and are compared and interpreted on the basis of insight at the product level. With data from the Netherlands in the year 2000, we find that environmental impact increases with increasing household expenditures, although the degree to which the environmental impact increases differs per impact category. Climate change and eutrophication increase less than proportionally with increasing expenditures. Acidification increases nearly proportionally with increasing expenditures, whereas smog formation increases more than proportionally. It appears that the mix of necessities and luxuries to which an environmental impact is related is essential in explaining the relationship.     

Explaining Economic Restructuring: An input-output analysis of organisational change in the European Union

This article investigates the extent to which the European economy (as a whole) has entered a period of restructuring from 1970 to the present, and assesses whether different theories of restructuring can explain the processes involved.Three political economy perspectives on restructuring are presented: flexible specialisation, neo-Schumpeterian/long wave, and Regulation. The extent of organisational restructuring is identified using an input-output methodology that separates supply-side and demand-side change. Supplyside output change indicates the importance of vertical externalisation, which all restructuring theories identify as important. This empirical methodology is applied using EU wide input-output tables for 1970, 1975, 1980, 1985 and 1991. Considerable restructuring is indicated as having occurred, particularly in European manufacturing industry. But this restructuring seems not to be consistent with any single perspective; rather all three are relevant in different circumstances. Finally, an attempt is made to sketch a theory of the firm consistent with the evidence presented.     

Price-setting power vs. private information: An experimental evaluation of their impact on holdup

This paper investigates the extent of the holdup problem in a buyer–seller relationship in which the seller has private information about his alternative opportunities. Theory predicts that, compared to a situation in which outside options are publicly observed, the seller obtains an informational rent whereas the buyer bears an informational loss. As a result the seller is predicted to invest more while the buyer is expected to invest less. In contrast to this, private information has no impact on the investment levels observed in the experiment. But actual investments do increase with the price-setting power of the investor. These findings are roughly consistent with a model in which agents are inequality-averse. Overall the results question some recent theoretical suggestions that private information rents might substitute for price-setting power in mitigating holdup.     

An input-output approach to the estimation of employment requirements in Europe

This study reports the results of an attempt to analyse the employment requirements per one million dollars of final demand on the basis of an input-output model, in which the standard technology matrix is partitioned into domestic and import input coefficient matrices for twelve European countries. International comparisons of employment requirements indicate that the labour productivity is higher for high income countries while employment requirements per one million dollars of final demand is less closely associated with the size of the country. Our results demonstrate that the total employment requirements estimated on the basis of the total input coefficients matrix or the domestic coefficients matrix retain the same ordinal ranking of the sectors. For developing countries, where the data are not available for domestic and import coefficients matrix separately, the methodology of estimating employment requirements (per unit of final demand) through total coefficients matrix may be adopted since our experience indicates that ranking of the sectors in terms of labour productivity is not altered between two approaches for twelve European countries.     

Quantification of interdependencies between economic systems and ecosystem services: An input-output model applied to the Seine estuary

The aim of this paper is to assess the possible contribution of an input-output model towards two of the basic principles of the sustainability strategy of integrated coastal zone management (ICZM) and Post-Normal Science. According to these principles, decision-support tools should offer a holistic perspective and handle high uncertainty. The difficulties in reaching sustainability are due partly to the prevailing use of “narrow-system-boundary” tools that are non-holistic. Consequently, they fail to capture important ecosystem services and ignore interdependencies between them. To comply with the basic principles, our method allows environmental assets to be evaluated in multiple units and integrates results from recent researches in natural sciences. Both enable coverage of interdependencies between ecosystem services. Thereby, we enlarge input-output modelling from the two conventional ecosystem services of sink and provisioning to the most vital ones: the supporting services. An application to the Seine estuary addresses the impacts of maritime transportation infrastructures on nursery habitats for commercial fish. The ecosystem services covered are life support and resource provisioning. Our results show that the restoration of a total of 73.7 km² of nursery areas over the period 2004-2015 would result in a stock of sole in 2015 that exceeds the “business as usual” scenario by 44.2% (uncertainty range: 35.9%-69.9%). In spite of high restoration costs, the negative macro-economic impact is very low. However, on the sector level, a trade-off results between nurseries and three economic sectors. The quantification of such trade-offs in our model is particularly useful to public participation in decision-making.     

Credit information sharing and banking crises: An empirical investigation

We study the effect of credit information sharing on the likelihood of banking crises using a comprehensive cross-country dataset for the period from 1975 to 2006. The empirical analysis shows that credit information sharing reduces the likelihood of banking crises and it does more so in low income countries. The effect is statistically and economically significant, and applies to both public registries and private bureaus. Furthermore, we show that credit information sharing reduces the impact of rapid credit growth on banking crises. Specifically, rapid credit growth is less likely to lead to a banking crisis in countries with credit information sharing.     

Pollution macro-economic trade-off at regional level (An input-output analysis of Moreton Region)

The conflict between economic development and growth and environmental quality at a regional level has been analysed using input-output techniques. The trade-offs between macro-economic goals such as output expansion, income growth, employment creation on the one hand, and pollution abatement on the other, have been quantified using multiplier analysis. These trade-offs provide valuable information for policy and planning purposes. The normative implications of the empirical results of the study, the conceptual limitations and the scope for refinement are also discussed.     

A note on input-output analysis and macroeconometric models

This note presents a theoretical discussion on the introduction of input-output analysis in long-term macro-econometric models. It emphasizes the importance of making the treatment of imports explicit. It is shown that earlier works on macroeconometric models are inconsistent.     

Non-commitment in performance evaluation and the problem of information distortions

Auditing is modeled in a sequential game without commitment. The manager must decide whether and where to audit a worker's output, taking into account all interim information he has obtained. The worker will work just hard enough (and show it) to divert the manager from making an audit or cover up, withholding information about his work to make an audit more difficult. This usually raises the costs of setting work incentives, so incentives are softened, sometimes drastically. Moreover, when a worker's on-the-job information is valuable for entrepreneurial decisions, work incentives must be softened to improve the internal flow of information.     

Aggregate planning by means of input-output and material-balances systems

After the essential differences between input-output and material-balances systems are summarized, a basic disaggregated production model is aggregated successively according to input-output and material-balances principles. Different conditions for perfect aggregation apply in the two cases. When aggregation is imperfect, an upper limit on aggregation errors is computed and a simple numerical example is presented to illustrate the differences between the two approaches. The conclusion is that the case for input-output analysis is not as clear-cut as is frequently suggested in the planning literature.     

Markets, bureaucracies and groups in the information society : An institutional appraisal of the impacts of information technology

The issue regarding the impact of information technology on organizations is here reconsidered by applying a new analytical framework. Information technology affects the cost of transactions which take place under alternative institutional arrangements, such as markets, bureaucracies and groups; technology can affect the efficiency of the organizations which apply it and the organizational behaviour of their members. Empirical data show how computerization changes organizational patterns according to efficiency considerations. An enlargement of the framework to take into account alternative mechanisms for organizational participation, such as exit, voice and loyalty, allows to examine the impacts of information technology on participation possibilities within organizations.     

Towards a new social input-output table: The dynamics of social groups and institutions

Input-output analysis has been very helpful to elaborate the 5 and 10 years sectoral forecasts which support the French medium-term economic policy. This analysis makes it possible to take into account the interdependences between the various sectors of the economy. This sort of analysis must be completed by another kind of analysis which is not based on the sectors of the economic activity but instead on the groups which characterize the French society in its present state of development. The relations between the groups set up on several plans, i.e., the economic, sociological, political and ideological plans. On the one hand, the behavior of each group depends on the characteristics proper to the groups, and, on the other hand, on its situation on the various plans, and mainly on the other groups. In this system of social accounting, which has still to be built up, the social groups play the part of the industries, the inputs are the modifications of the situation of each group and the outputs are the behavior of this group facing these modifications of its situation.This is the beginning of a research endeavor made particularly difficult by the great number of plans of interactions between the groups that have to be taken into account.