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

Luis Daniel Torres Gonzalez () and Jangho Yang
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Luis Daniel Torres Gonzalez: Department of Economics, New School for Social Research
Jangho Yang: Oxford Martin School, University of Oxford

No 1804, Working Papers from New School for Social Research, Department of Economics

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.

Keywords: Input-Output matrices; Stochastic Input-Output Analysis; Statistical Structure; Economic Structure; Bayesian estimation; US economy (search for similar items in EconPapers)
JEL-codes: C11 C46 C51 C52 C67 D57 O51 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2018-04
New Economics Papers: this item is included in nep-hme and nep-ore
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http://www.economicpolicyresearch.org/econ/2018/NSSR_WP_042018.pdf First version, 2018 (application/pdf)

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