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Locating the Most Important Transactions of the Economy by an Alternative Sensivity Analysis. Application to the Employment Structure of Nine European Countries

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  • Tarancon, M.A.

Abstract

The input-output structural analysis is a valuable tool when designing economic policies since it allows us to know which are the most important linkages and sectors of an economic system. The coefficients' sensitivity analysis is one of the major approaches of the structural analysis. With it we may measure how the output is influenced by changes in the coefficients. However, the classical sensitivity analysis, based on the Sherman & Morrison formula, shows several limitations. In this paper, an alternative approach based on linear programming and that deals with such challenges is proposed. The technique is then applied to an employment analysis in nine European countries.

Suggested Citation

  • Tarancon, M.A., 2006. "Locating the Most Important Transactions of the Economy by an Alternative Sensivity Analysis. Application to the Employment Structure of Nine European Countries," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 6(1).
    • Handle: RePEc:eaa:eerese:v:6:y2006:i:6_3
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    References listed on IDEAS

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    1. R C Jensen & G R West, 1980. "The Effect of Relative Coefficient Size on Input—Output Multipliers," Environment and Planning A, , vol. 12(6), pages 659-670, June.
    2. Hewings, Geoffrey J. D. & Fonseca, Manuel & Guilhoto, Joaquim & Sonis, Michael, 1989. "Key sectors and structural change in the Brazilian economy: A comparison of alternative approaches and their policy implications," Journal of Policy Modeling, Elsevier, vol. 11(1), pages 67-90.
    3. Hermann Schnabl, 2003. "The ECA-method for Identifying Sensitive Reactions within an IO Context," Economic Systems Research, Taylor & Francis Journals, vol. 15(4), pages 495-504.
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    More about this item

    Keywords

    input-output; important coefficients; sensitivity analysis; employment;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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