On the impossibility of calculating the product technology in the Supply-Use model
The Supply-Use input-output model of the SNA and Eurostat is examined. For the product-by-product IO tables, two hypothesis are possible: “product technology”, largely adopted (Eurostat A) and examined here, and “industry technology” (Eurostat B). One examines the calculability of the model. Negatives are an issue; (i) they are systematical in the inverse supply matrix: negative probabilities are impossible, Markov chains become impossible; (ii) negative flows are nonsense in symmetric matrix of coefficients or in inverse matrices. Matrices must be square what removes much of their interest. Same conclusions can be transposed to industry-by-industry IO tables under fixed-industry-sales-structure assumption (Eurostat C).
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- Ten Raa, M.H. & Jansen, P., 1989.
"The choice of model in the construction of input-output coefficients matrices,"
1989-1, Tilburg University, Center for Economic Research.
- Jansen, Pieter Kop & ten Raa, Thijs, 1990. "The Choice of Model in the Construction of Input-Output Coefficients Matrices," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(1), pages 213-27, February.
- Jackson, Randall W., 1989. "Probabilistic input-output analysis: Modeling directions," Socio-Economic Planning Sciences, Elsevier, vol. 23(1-2), pages 87-95.
- Mattey, J. & Ten Raa, T., 1997. "Primary versus secondary production techniques in US manufacturing," Other publications TiSEM ea0c1199-90e3-4a30-91f8-7, Tilburg University, School of Economics and Management.
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