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The Import Leakage Effect and the Effectiveness of Fiscal Policy: An Input-Output Analysis

Author

Listed:
  • Soofi, Abdollah S
  • Parvin, Kumars

Abstract

A suggested methodology to measure import leakage magnitude from an economy within the framework of an input-output transactions table, which does not distinguish between domestic and imported inputs, is the paper's objective. The model estimated import leakages due to increased government spending using an Iranian input-output table for 1973-74. Due to the 1974 import structure of the Iranian economy, government fiscal policy (mainly government spending) had a substantially limited effect controlling aggregate demand. The model simulation indicates magnitude of total import leakage for all industries was 20 percent of the estimated increase in 1977 government spending.

Suggested Citation

  • Soofi, Abdollah S & Parvin, Kumars, 1986. "The Import Leakage Effect and the Effectiveness of Fiscal Policy: An Input-Output Analysis," Public Finance = Finances publiques, , vol. 41(3), pages 430-439.
    • Handle: RePEc:pfi:pubfin:v:41:y:1986:i:3:p:430-39
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