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Straightening out the concept of direct and indirect input requirements

Author

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  • Ferran Sancho

    () (Department of Economics)

Abstract

Gim & 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 concepts. The advantage of our approach is that it unravels and clarifies the step by step actual mechanisms behind the accounting rules.

Suggested Citation

  • Ferran Sancho, 2012. "Straightening out the concept of direct and indirect input requirements," Economics Bulletin, AccessEcon, vol. 32(1), pages 502-509.
  • Handle: RePEc:ebl:ecbull:eb-11-00758
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    File URL: http://www.accessecon.com/Pubs/EB/2012/Volume32/EB-12-V32-I1-P47.pdf
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    References listed on IDEAS

    as
    1. Eve Chiapello & A. Hurand, 2011. "Contribution," Post-Print hal-00681170, HAL.
    2. Miller,Ronald E. & Blair,Peter D., 2009. "Input-Output Analysis," Cambridge Books, Cambridge University Press, number 9780521517133, March.
    3. 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.
    4. Miller,Ronald E. & Blair,Peter D., 2009. "Input-Output Analysis," Cambridge Books, Cambridge University Press, number 9780521739023, March.
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    Cited by:

    1. Ferran Sancho, 2013. "Some conceptual difficulties regarding ‘net’ multipliers," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 537-552, October.
    2. Erik Dietzenbacher & Manfred Lenzen & Bart Los & Dabo Guan & Michael L. Lahr & Ferran Sancho & Sangwon Suh & Cuihong Yang, 2013. "Input--Output Analysis: The Next 25 Years," Economic Systems Research, Taylor & Francis Journals, vol. 25(4), pages 369-389, December.

    More about this item

    Keywords

    output multipliers; input multipliers;

    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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