Decomposing the Induced Income Changes in Input-Output Models

Richard N. Boisvert

American Journal of Agricultural Economics, 1984, vol. 66, issue 1, 99-103

Abstract: This paper demonstrates formally that type I and type II income multipliers are proportional across all sectors and that in any input-output model, the difference between the multipliers can range from zero to a maximum of the reciprocal of one less the propensity to consume locally. The conditions which lead to these two extreme values are discussed. For intermediate situations, the difference is decomposed into proportions attributable to final payments and imports.

Date: 1984
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:66:y:1984:i:1:p:99-103.

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