On the fallacy of forward linkages: A note in the light of recent results
Following on from de Mesnard’s (2009) radical criticism of the Ghosh supply-driven model, this paper draws the dramatic consequences for the widespread use of forward linkages in input-output analysis applied to regional science: the practice must be abandoned. The arguments are based on three points: (i) it is impossible simultaneously to choose the Leontief model for the backward effects and the Ghosh model for the forward effects; (ii) it is impossible simultaneously to consider a production function of complementary inputs (Leontief) and a production function of perfectly substitutable inputs (Ghosh); and most importantly (iii) price effects and output effects remain inextricably mixed in the Ghosh model, so precluding its use for analyzing forward effects on quantities or prices.
|Date of creation:||2009|
|Contact details of provider:|| Postal: Pôle d'Economie et de Gestion - 2, bd Gabriel - BP 26611 - F-21066 Dijon cedex - France|
Phone: 00 333 80 39 54 41
Fax: 00 333 80 39 54 43
Web page: http://www.leg.u-bourgogne.fr/
More information through EDIRC