STOCHASTIC ANALYSIS OF INPUT–OUTPUT MULTIPLIERS ON THE BASIS OF USE AND MAKE TABLES

Thijs ten Raa and José Manuel Rueda‐Cantuche
Authors registered in the RePEc Author Service: José Manuel Rueda-Cantuche

Review of Income and Wealth, 2007, vol. 53, issue 2, 318-334

Abstract: Although technical coefficients are estimated on the basis of flow data (use and make matrices), they are rarely treated as random variables. If this is done, an error term is added to the coefficients, rather than derived from the distribution of the data. Even so, the calculation of multipliers, by means of the Leontief inverse, is difficult. Due to the nonlinearity of this operation, the multiplier estimates are biased. By going back to the flow data, this paper provides unbiased and consistent employment and output multipliers estimates for the Andalusian economy. Rectangular use and make matrices are accommodated and problems associated with the construction and estimation of technical coefficients and the Leontief inverse are circumvented.

Date: 2007
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https://doi.org/10.1111/j.1475-4991.2007.00227.x

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Chapter: Stochastic Analysis of Input–Output Multipliers on the Basis of Use and Make Tables (2009)
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