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A multiplier evaluation of primary factors supply–shocks

Author

Listed:
  • M. Alejandro Cardenete

    () (Department of Economics, Universidad Loyola Andalucía)

  • M. Carmen Lima

    () (Department of Economics, Quantitative Methods and Economic History, Universidad Pablo de Olavide)

  • Ferran Sancho

    () (Department of Economics, Universidat Autònoma de Barcelona)

Abstract

Demand-side multipliers have ruled within multisectoral models as the main indicators for policy effectiveness and key-sector determination. The causal link between new exogenous final demand and responded endogenous total output is well understood and has been the basis for such a prevalent demand-side analysis both in linear interindustry analysis and in non-linear applied general equilibrium models. In this paper we shift the perspective to supply-side injections and we do so by studying the repercussion effects of marshalling additional primary factors, labor and capital services, which are injected into the economy and give rise to a general resource reallocation. As a result, we obtain estimates of supply multipliers that provide complementary information to standard demand multipliers. We illustrate the methodology using an empirical general equilibrium model built with the most recent data for the region of Andalusia, Spain.

Suggested Citation

  • M. Alejandro Cardenete & M. Carmen Lima & Ferran Sancho, 2017. "A multiplier evaluation of primary factors supply–shocks," Working Papers 17.01, Universidad Pablo de Olavide, Department of Economics, Quantitative Methods and Economic History.
  • Handle: RePEc:pab:wphaei:17.01
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    File URL: http://www.upo.es/serv/bib/wphaei/haei1701.pdf
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    References listed on IDEAS

    as
    1. Manuel Alejandro Cardenete & Ferran Sancho, 2012. "The Role Of Supply Constraints In Multiplier Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 24(1), pages 21-34, June.
    2. Victor Ginsburgh & Michiel Keyzer, 2002. "The Structure of Applied General Equilibrium Models," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262571579, January.
    3. Ana-Isabel Guerra & Ferran Sancho, 2011. "Budget-constrained expenditure multipliers," Applied Economics Letters, Taylor & Francis Journals, vol. 18(13), pages 1259-1262.
    4. repec:jns:jbstat:v:182:y:1968:i:1:p:211-215:n:14 is not listed on IDEAS
    5. Welsch, Heinz, 2008. "Armington elasticities for energy policy modeling: Evidence from four European countries," Energy Economics, Elsevier, vol. 30(5), pages 2252-2264, September.
    6. Francisco Miguel & Maria Llop & Antonio Manresa, 2014. "Sectoral productivity gains in two regional economies: key sectors from a supply-side perspective," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(3), pages 731-744, November.
    7. Robinson, Sherman & Roland-Holst, David W., 1988. "Macroeconomic structure and computable general equilibrium models," Journal of Policy Modeling, Elsevier, vol. 10(3), pages 353-375.
    8. Miguel Vélez, Francisco Javier de & Llop Llop, Maria & Manresa, Antonio, 1954-, 2013. "Supply Multipliers in Two Regional Economies," Working Papers 2072/213636, Universitat Rovira i Virgili, Department of Economics.
    9. Jan Oosterhaven & Dirk Stelder, 2002. "Net Multipliers Avoid Exaggerating Impacts: With A Bi-Regional Illustration for the Dutch Transportation Sector," Journal of Regional Science, Wiley Blackwell, vol. 42(3), pages 533-543.
    10. Erik Dietzenbacher, 2005. "More on multipliers," Journal of Regional Science, Wiley Blackwell, vol. 45(2), pages 421-426.
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    More about this item

    Keywords

    Supply multipliers; applied general equilibrium; supply-side key sectors;

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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