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Adding Supply-Driven Consumption Makes The Ghosh Model Even More Implausible


  • Jan Oosterhaven


Guerra and Sancho (2011) argue that adding a supply-driven consumption function to the Ghosh model diminishes its implausibility in the case of centrally planned economies. Extending the Leontief model with a demand-driven consumption function does make that model more realistic. Extending the Ghosh model, however, makes it even more implausible in the case of a market economy, while it becomes even more problematic as a guide for a centrally planned economy. The prime reason is that complementarities between inputs are negated, not only for firms, but now also for households. Consequently, industry and aggregate output may now increase, while corresponding value added decreases, and vice versa.

Suggested Citation

  • Jan Oosterhaven, 2012. "Adding Supply-Driven Consumption Makes The Ghosh Model Even More Implausible," Economic Systems Research, Taylor & Francis Journals, vol. 24(1), pages 101-111, October.
  • Handle: RePEc:taf:ecsysr:v:24:y:2012:i:1:p:101-111 DOI: 10.1080/09535314.2011.635137

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    References listed on IDEAS

    1. Aysan, Ahmet Faruk & Hacihasanoglu, Yavuz Selim, 2007. "Investigation on the Determinants of Turkish Export-Boom in 2000s," MPRA Paper 5493, University Library of Munich, Germany.
    2. Kamil Yilmaz, 2010. "Taking Stock: The Customs Union between Turkey and the EU Fifteen Years Later," Koç University-TUSIAD Economic Research Forum Working Papers 1023, Koc University-TUSIAD Economic Research Forum.
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    5. Evren Erdogan Cosar, 2002. "Price and Income Elasticities of Turkish Export Demand : A Panel Data Application," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 2(2), pages 19-53.
    6. Sinha, Anushree & Khan, Haider, 2008. "Gender and Informal Sector Analysis in India: Economy Wide Approaches," WIDER Working Paper Series 065, World Institute for Development Economic Research (UNU-WIDER).
    7. Axel Schaffer, 2007. "Women's and Men's Contributions to Satisfying Consumers' Needs: A Combined Time Use and Input-Output Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 19(1), pages 23-36.
    8. Baslevent, Cem & Onaran, Ozlem, 2004. "The Effect of Export-Oriented Growth on Female Labor Market Outcomes in Turkey," World Development, Elsevier, vol. 32(8), pages 1375-1393, August.
    9. Öner Günçavdi & Suat KüçükçifçI & Andrew McKay, 2003. "Adjustment, Stabilisation and the Analysis of the Employment Structure in Turkey: An Input- Output Approach," Economic Change and Restructuring, Springer, vol. 36(4), pages 315-331, December.
    10. Albert E. Steenge & Marija Bockarjova, 2007. "Thinking about Imbalances in Post-catastrophe Economies: An Input-Output based Proposition," Economic Systems Research, Taylor & Francis Journals, vol. 19(2), pages 205-223.
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    Cited by:

    1. Juan C. Surís-Regueiro & José L. Santiago, 2016. "An Input-Output methodological proposal to quantifying socio economic impacts linked to supply shocks," Working Papers 1603, Universidade de Vigo, Departamento de Economía Aplicada.
    2. Jan Oosterhaven & Michiya Nozaki, 2014. "The impact of production and infrastructure shocks to the Japanese inter-regional economy: A non-linear input-output programming approach," ERSA conference papers ersa14p163, European Regional Science Association.
    3. Oosterhaven, J. & Bouwmeester, M.C. & Nozaki, M., 2013. "The impact of production and infrastructure shocks," Research Report 13017-GEM, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    4. Oosterhaven, Jan, 2017. "Key Sector Analysis," Research Report 17015-GEM, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    5. repec:dgr:rugsom:13017-gem is not listed on IDEAS
    6. Manresa, Antonio & Sancho, Ferran, 2013. "Supply and demand biases in linear interindustry models," Economic Modelling, Elsevier, vol. 33(C), pages 94-100.
    7. Scott Kelly & Peter Tyler & Douglas Crawford-Brown, 2016. "Exploring Vulnerability and Interdependency of UK Infrastructure Using Key-Linkages Analysis," Networks and Spatial Economics, Springer, vol. 16(3), pages 865-892, September.

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