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.     

A review of recent multi-region input-output models used for consumption-based emission and resource accounting

The interest in consumption-based emission and resource accounting has grown significantly. Many studies juxtapose consumer emissions (carbon footprint) and producer (territorial) emissions of greenhouse gases in order to demonstrate the effects of trade on the national emission budget. To this end, a respectable number of studies have been undertaken worldwide in order to estimate emissions embedded in international trade of numerous countries and world regions. Input-output approaches, and increasingly multi-region input-output (MRIO) models, are commonly chosen as they provide an appropriate methodological framework for complete carbon footprint estimates at the national and supra-national level. With increasing processing capabilities of computers and a wider availability of economic accounts, environmental accounts and trade data such models are now being implemented on a wide scale.After a brief overview of salient single-region input-output studies I provide an in-depth review of the most recent multi-region input-output models used for the purpose of consumption-based environmental accounting. The main methodological features and important results are described for around twenty studies covering the years 2007 to 2009. This is followed by a detailed review of studies dealing with uncertainty in MRIO analysis, an area which has not received a lot of attention so far. I conclude that further research is mainly needed in two areas, a) improvements in data availability and quality and b) improvements in the accuracy of MRIO modelling.     

Equilibrium and quasi-equilibrium existence theorems for a general model without ordered preferences

In previous papers Gale and Mas-Colell (1975) and later Florenzano (1981) obtained a fixed point theorem. Gale and Mas-Colell proved also an existence equilibrium theorem. In this paper I offer a more general fixed point theorem that embodies as special cases the above mentionaed results. The new fixed point theorem is used as a main result in obtaining a general equilibrium theorem in weaker conditions than those of the previous proofs.     

A note on the underestimation and overestimation in stochastic input-output models

Here we show that (i) the Leontief inverse (I – A)^-1 is underestimated when the elements of A, the fixed coefficient input–output matrix, are biproportionally stochastic, and (ii) the output vector in a non-linear input–output system is overestimated when the final demand vector is stochastic.     

Proper scoring rules for general decision models

If a decision maker whose behavior conforms to the max-min expected utility model is faced with a scoring rule for a subjective expected utility decision maker, she will always announce a probability belonging to her set of priors; moreover, for any prior in the set, there is a scoring rule inducing the agent to announce that prior. We also show that on the domain of Choquet expected utility preferences with risk neutral lottery evaluation and totally monotone capacities, proper scoring rules do not exist. This implies the non-existence of proper scoring rules for any larger class of preferences (CEU with convex capacities, multiple priors).     

Some comparative-statics results for nonlinear input-output models of a multisectored economy,and related results for nonlinear price-demand relations

For a nonlinear version of the linear input-output model of Leontief, we consider the effect, on the vector x of total gross outputs, of changes in the components of the final-demand vector c. For example, it is shown that, for a certain important class of models, the “large-change elasticity” of any component of x, with respect to any component of c, is less than or equal to unity. Some similar results are proved concerning properties of nonlinear price-demand relations for the case in which all goods are weak gross substitutes. Unlike earlier work in this general area, we do not introduce hypotheses concerning the indecomposability or homogeneity of certain mappings. For that reason, the results are valid for the price-demand relation for a single firm, or for any collection of firms.     

Less than perfect aggregation of input-output models: The choice of bounds

An upper bound used in consolidating input-output models is shown to be non-minimal, and thus non-optimal. The least upper bound is then obtained. Non-least upper bounds are shown to be useful only when complemented by corresponding lower ones.     

A general method for comparative dynamics in continuous-time models

This paper develops a general and applicable method for the computation of comparative dynamics in continuous-time perfect foresight models. The key technique in our method is the Jordan decomposition of the Jacobian matrix. This enables us to derive analytical solutions when dealing with high-dimensional systems with repeated eigenvalues. In an application, we compute comparative dynamics of an unanticipated expansionary monetary policy in scenarios with and without repeated eigenvalues. We find that the short-run effects on the social welfare are opposite in the two scenarios, while the long-run effects are similar.     

Markovian equilibrium in a class of stochastic games: existence theorems for discounted and undiscounted models

Summary We study a strategic version of the neoclassical growth model under possible production uncertainty. For a general specification of the problem, we establish (i) the existence of stationary Markov equilibria in pure strategies for the discounted game, and (ii) the convergence, under a boundedness condition, of discounted equilibrium strategies to a pure strategy stationary Markovian equilibrium of the undiscounted game as the discount factor tends to unity. The same techniques can be used to prove that such convergence also obtains in all finitestate, finite-action stochastic games satisfying a certain full communicability condition. These results are of special interest since there are well known examples in the literature in which the limit of discounted equilibria fails to be an equilibrium of the undiscounted game.We are grateful to Marcus Berliant, M. Ali Khan, Mukul Majumdar, and an anonymous referee for helpful suggestions, and to Bonnie Huck for technical assistance. The first author acknowledges research support from the Columbia University Council for the Social Sciences.     

Perturbations of Matrices: A theorem on the perron vector and its applications to input-output models

This is a much revised version of my paper The Effects of Errors in Matrices on the Perron Vector: An Application to Input-Output Models, which was presented at the 1987 European Meeting of the Econometric Society, held in Copenhagen. I would like to thank Gerard Sierksma and Albert E. Steenge for valuable discussions and two anonymous referees for their helpful comments.     

Non-linearities in applied general equilibrium models

In this paper we discuss some extensions of the general equilibrium model Keller (1980) used to analyze tax-incidence. We compute the comparative static results of Keller on tax-incidence, now taking into account non-linearities. This is done by employing a method of iterative linearization. It turns out that the error made by linearization is small.     

Linking dynamic economic and ecological general equilibrium models

Although ecosystems provide myriad services to economies, only one service is considered in most renewable-resource models. The general equilibrium bioeconomic model introduced here admits a second service, and more importantly it accounts for how the two services are impacted by interactions within an eight-species ecosystem and interactions within a regional economy. Endangered Steller sea lion recovery measures via alternative pollock quotas change all ecosystem populations and all economic variables. While non-use values associated with the ecosystem (e.g., existence values) are not considered, all species matter for the economy because they are all used indirectly as support for ecosystem services. Regional welfare changes from reduced quotas show the tradeoff between consumptive and non-consumptive uses of the ecosystem.     

The general role of factor intensity in the theorems of international trade

The pattern of factor intensities often allows predictions of directions of change in 2 × 2 trade theory, but the most general higher dimensional extensions have said little about analogous predictions. This paper obtains general results in an elementary way.     

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.     

Accounting for technical substitution in the input-output model

Input-output analysis is a general equilibrium economic model that is being applied with increasing frequency to situations in which the input patterns of various economic activities are bound to change. Applications of the model in this context unduly strain the model's customary assumption of fixed coefficients, an assumption which precludes the substitution of inputs in production processes. The focus here is on the development of a general procedure for incorporating input substitution under various sets of conditions into the input-output model.     

A general equilibrium framework for the affine class of term structure models

The Duffie and Kan (1966) model, which can be considered as the most general affine term structure formulation, was originally specified in terms of risk-adjusted stochastic processes for its state variables. The goal of the present paper is to derive a Duffie and Kan (1966) model specification under the physical probability measure that is compatible with the formulation given by the authors under the equivalent martingale (money market account) measure. For that purpose, the Duffie and Kan (1966) model will be fitted into a general equilibrium monetary framework. The resulting analytical solution for the vector of factor risk premiums enables the econometric estimation of the model parameters using a time-series or a panel-data approach, and nests, as special cases, several other specifications already proposed in the literature.Received: November 2002, Accepted: February 2004, JEL Classification: E43, G11, G12Financial support by FCTs research grant PRAXISXXI/BD/5712/95 is gratefully acknowledged.