Straightening out the concept of direct and indirect input requirements
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 accounting concepts.
|Date of creation:||14 Oct 2011|
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- 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.
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