Straightening out the concept of direct and indirect input requirements
AbstractGim & Kim (1998) proposed a generalization of Jeong (1982, 1984) reinterpretation of the Hawkins-Simon condition for macroeconomic stability to off-diagonal matrix elements. This generalization is conceptually relevant for it offers a complementary view of interindustry linkages beyond final or net output influence. The extension is completely similar to the 'total flow' idea introduced by Szyrmer (1992) or the 'output-to-output' multiplier of Miller & Blair (2009). However the practical implementation of Gim & Kim is actually faulty since it confuses the appropriate order of output normalization. We provide a new and elementary solution for the correct formalization using standard interindustry accounting concepts.
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Bibliographic InfoPaper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 887.11.
Date of creation: 14 Oct 2011
Date of revision:
output multipliers; input multipliers; Leontief multipliers.;
Other versions of this item:
- Ferran Sancho, 2012. "Straightening out the concept of direct and indirect input requirements," Economics Bulletin, AccessEcon, vol. 32(1), pages 502-509.
- C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
- D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
- R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
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- Theodore Mariolis & Eleftheria Rodousaki, 2011. "Total Requirements for Gross Output and Intersectoral Linkages: A Note on Dmitriev's Contribution to the Theory of Profits ," Contributions to Political Economy, Oxford University Press, vol. 30(1), pages 67-75.
- Ferran Sancho, 2012. "Some Conceptual Difficulties Regarding 'Net' Multipliers," UFAE and IAE Working Papers 910.12, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
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