ENDOGENIZING CONSUMPTION IN THE INPUT†OUTPUT MODEL: THEORY AND APPLICATION

Hidekazu Itoh and Masayuki Doi

Review of Urban & Regional Development Studies, 2008, vol. 20, issue 2, 151-166

Abstract: Since the basic model of input†output analysis does not take into consideration the income effect on consumption expenditure, we constructed a model which endogenizes consumption and breaks down integrated production inducement into Leontief and Keynesian effects in a generalized context and in two solution approaches. Using short†term marginal consumption propensities, we estimated that Keynesian effects make up about 14% of the integrated inducement effects for Japan. The public services sector, which is not influential in the basic model, becomes very influential in consideration of Keynesian effects. Manufacturing and service sector products are the main targets of the expanded consumption. The impact of a change in exogenous final demand can be easily simulated by applying the suggested apparent input coefficient matrix to the integrated inverse matrix.

Date: 2008
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/j.1467-940X.2009.00153.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:revurb:v:20:y:2008:i:2:p:151-166

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0917-0553

Access Statistics for this article

More articles in Review of Urban & Regional Development Studies from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().