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On the impossibility of calculating the product technology in the Supply-Use model


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  • MESNARD, Louis de

    (LATEC - CNRS UMR 5118 - Université de Bourgogne)


The Supply-Use input-output model of the SNA and Eurostat is examined. For the product-by-product IO tables, two hypothesis are possible: “product technology”, largely adopted (Eurostat A) and examined here, and “industry technology” (Eurostat B). One examines the calculability of the model. Negatives are an issue; (i) they are systematical in the inverse supply matrix: negative probabilities are impossible, Markov chains become impossible; (ii) negative flows are nonsense in symmetric matrix of coefficients or in inverse matrices. Matrices must be square what removes much of their interest. Same conclusions can be transposed to industry-by-industry IO tables under fixed-industry-sales-structure assumption (Eurostat C).

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Paper provided by LEG, Laboratoire d'Economie et de Gestion, CNRS, Université de Bourgogne in its series LEG - Document de travail - Economie with number 2008-06.

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Length: 19 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:lat:legeco:2008-06

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Keywords: Input-Output; SNA; Eurostat; Supply-Use; Make-Use..;

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  1. Jackson, Randall W., 1989. "Probabilistic input-output analysis: Modeling directions," Socio-Economic Planning Sciences, Elsevier, vol. 23(1-2), pages 87-95.
  2. Mattey, J. & Raa, T. ten, 1997. "Primary versus secondary production techniques in US manufacturing," Open Access publications from Tilburg University urn:nbn:nl:ui:12-86070, Tilburg University.
  3. Jansen, Pieter Kop & ten Raa, Thijs, 1990. "The Choice of Model in the Construction of Input-Output Coefficients Matrices," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(1), pages 213-27, February.
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