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On the Accuracy of RAS Method in an Emergent Economy

Author

Listed:
  • Emilian Dobrescu

    () (Center of Macroeconomic Modelling, Romanian Academy, Bucharest, Romania)

  • Viorel Gaftea

    (Center of Macroeconomic Modelling, Romanian Academy, Bucharest, Romania)

Abstract

The goal of this paper is to check the applicability of RAS procedure (in its conventional definition) on statistical series of an emergent economy, as the Romanian one. As it is known, during transition from centrally planned system to market mechanisms, the society passes through deep restructuration, consisting in complex institutional changes, technological shifts, sectoral reallocation of productive factors, which continuously affected the input-output technical coefficients. Testing the RAS algorithm on such a volatile framework is a notable search challenge. Our empirical experiment is based on annual input-output tables for two decades (1989- 2008). In order to easier manipulate the available data base, the extended classification of economic activities containing 105 branches has been aggregated into 10 sectors. For each year, two (10x10) matrices: aij (statistically recorded technical coefficients) and raij (the same coefficients estimated using RAS method) were computed. The paper is organized in three sections. The first discusses several methodological issues of this algorithm. It also evaluates the differences between matrices aij and raij, involving both categories of accuracy measures - either the “cell-by-cell” comparison or the aggregated indicators. The second section extensively examines these measures, the presentation being systematized sectorally. Such an approach allows revealing specificities of different branches in their inter-industry co-operation. The third section sketches an overview of the obtained results and extracts some conclusions related to the problems that arise in the application of RAS method.

Suggested Citation

  • Emilian Dobrescu & Viorel Gaftea, 2012. "On the Accuracy of RAS Method in an Emergent Economy," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(32), pages 502-521, June.
  • Handle: RePEc:aes:amfeco:v:14:y:2012:i:32:p:502-521
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    References listed on IDEAS

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    1. Dobrescu, Emilian, 2009. "Measuring the Interaction of Structural Changes with Inflation," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 6(5), pages 5-99.
    2. Randall Jackson & Alan Murray, 2004. "Alternative Input-Output Matrix Updating Formulations," Economic Systems Research, Taylor & Francis Journals, vol. 16(2), pages 135-148.
    3. Emilian Dobrescu, 2009. "Estimating the Total Factor Productivity in Romanian Economy," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 11(26), pages 512-521, June.
    4. R. C. Jensen, 1980. "The Concept of Accuracy in Regional Input-Output Models," International Regional Science Review, , vol. 5(2), pages 139-154, August.
    5. Dobrescu, Emilian & Gaftea, Viorel & Scutaru, Cornelia, 2010. "Using the Leontief Matrix to Estimate the Impact of Investments upon the Global Output," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 176-187, July.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Dobrescu, Emilian, 2012. "Restatement of the I-O Coefficient Stability Problem," MPRA Paper 48567, University Library of Munich, Germany.
    2. Malik, Arunima & Lenzen, Manfred & Ely, Rômulo Neves & Dietzenbacher, Erik, 2014. "Simulating the impact of new industries on the economy: The case of biorefining in Australia," Ecological Economics, Elsevier, vol. 107(C), pages 84-93.
    3. Huang, Wei & Corbett, James J. & Jin, Di, 2015. "Regional economic and environmental analysis as a decision support for marine spatial planning in Xiamen," Marine Policy, Elsevier, vol. 51(C), pages 555-562.
    4. Florin-Marius PAVELESCU, 2012. "Fluctuation Of Economic Activity, Sectoral Distribution Of Gross Value Added And The Size Of Backward Multipliers In Romania During The Period 1989-2009," Romanian Journal of Economics, Institute of National Economy, vol. 35(2(44)), pages 88-112, December.
    5. Dobrescu, Emilian, 2013. "Restatement of the I-O Coefficient Stability Problem," Working Papers of Macroeconomic Modelling Seminar 132601, Institute for Economic Forecasting.
    6. Emilian Dobrescu, 2014. "A Hybrid Forecasting Approach," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 16(35), pages 390-390, February.

    More about this item

    Keywords

    input-output; technical coefficient; RAS;

    JEL classification:

    • 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

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