CLOSURE IN COLE'S REFORMULATED LEONTIEF MODEL: A Response to R. W. Jackson, M. Madden, and H. A. Bowman

Sam Cole

Papers in Regional Science, 1997, vol. 76, issue 1, 29-42

Abstract: ABSTRACT My paper The delayed impacts of plant closures in a reformulated Leontief model showed that the time‐varying impacts of changes to a regional economy could be approximated usefully by a simple elaboration of the Leontief inverse (Cole, 1988). I have applied the method in a variety of situations, typically to calculate the shifts in community income and its distribution following a major catastrophe. In all cases I use a single or multi‐region social accounting matrix. Since Jackson et al (1997) have been unable to reproduce my results I shall begin with a step‐by‐step demonstration. Then I shall show that their failure lies in their treatment of the external (rest‐of‐ world) sector. This appears to arise from their overly restrictive definition of input‐output analysis in relation to other types of model, and their confusion as to the difference between simplification, approximation, and model validation.

Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:bla:presci:v:76:y:1997:i:1:p:29-42

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