The Import Leakage Effect and the Effectiveness of Fiscal Policy: An Input-Output Analysis
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.
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Volume (Year): 41 (1986)
Issue (Month): 3 ()
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