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The Persistent Statistical Structure of the US Input-Output Coefficient Matrices: 1963-2007

Author

Listed:
  • Luis Daniel Torres Gonzalez

    () (Department of Economics, New School for Social Research)

  • Jangho Yang

    (Oxford Martin School, University of Oxford)

Abstract

The paper finds evidence for the existence of a statistical structure in the US input-output (I-O) coefficient matrices A = f{aij} for 1963-2007. For various aspects of matrices A we find smooth and unimodal empirical frequency distributions (EFD) with a remarkable stability in their functional form for most of the samples. The EFD of all entries, diagonal entries, row sums, and the (left and right) Perron-Frobenius eigenvectors are well described by fat-tailed distributions while the EFD of column sums and eigenvalue moduli are well explained by the normal distribution and the Beta distribution, respectively. The paper provides several economic interpretations of these statistical results based on the recent developments in the I-O analysis and the price of production literature. Our findings question some probabilistic assumptions conventionally adopted in the stochastic I-O analysis literature and call for a statistical approach to the discussion of the structure of I-O matrices.

Suggested Citation

  • Luis Daniel Torres Gonzalez & Jangho Yang, 2018. "The Persistent Statistical Structure of the US Input-Output Coefficient Matrices: 1963-2007," Working Papers 1804, New School for Social Research, Department of Economics.
  • Handle: RePEc:new:wpaper:1804
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    File URL: http://www.economicpolicyresearch.org/econ/2018/NSSR_WP_042018.pdf
    File Function: First version, 2018
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    More about this item

    Keywords

    Input-Output matrices; Stochastic Input-Output Analysis; Statistical Structure; Economic Structure; Bayesian estimation; US economy;

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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