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Stochastic Analysis Of Input–Output Multipliers On The Basis Of Use And Make Tables

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  • Thijs Ten Raa
  • José Manuel Rueda‐Cantuche

Abstract

Although technical coefficients are estimated on the basis of flow data (use and make matrices), they are rarely treated as random variables. If this is done, an error term is added to the coefficients, rather than derived from the distribution of the data. Even so, the calculation of multipliers, by means of the Leontief inverse, is difficult. Due to the nonlinearity of this operation, the multiplier estimates are biased. By going back to the flow data, this paper provides unbiased and consistent employment and output multipliers estimates for the Andalusian economy. Rectangular use and make matrices are accommodated and problems associated with the construction and estimation of technical coefficients and the Leontief inverse are circumvented.

Suggested Citation

  • Thijs Ten Raa & José Manuel Rueda‐Cantuche, 2007. "Stochastic Analysis Of Input–Output Multipliers On The Basis Of Use And Make Tables," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(2), pages 318-334, June.
    • Handle: RePEc:bla:revinw:v:53:y:2007:i:2:p:318-334
    DOI: 10.1111/j.1475-4991.2007.00227.x
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    Cited by:

    1. Antonio F. Amores & Thijs ten Raa, 2021. "Firm Efficiency, Industry Performance and the Economy: Three-Way Decomposition with an Application to Andalusia," World Scientific Book Chapters, in: Efficiency and Input-Output Analyses Theory and Applications, chapter 5, pages 67-89, World Scientific Publishing Co. Pte. Ltd..
    2. Umed Temurshoev, 2015. "Uncertainty treatment in input-output analysis," Working Papers 2015-004, Universidad Loyola Andalucía, Department of Economics.
    3. Reinout Heijungs & Arjan Koning, 2019. "Analyzing the effects of the choice of model in the context of marginal changes in final demand," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-22, December.
    4. Rodrigues, João F.D. & Rueda-Cantuche, José M., 2013. "A two-stage econometric method for the estimation of carbon multipliers with rectangular supply and use tables," Ecological Economics, Elsevier, vol. 95(C), pages 206-212.

    More about this item

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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