Are input-output coefficients really fixed?

Marc Jim M. Mariano, George Verikios and Kenneth Clements

Applied Economics, 2025, vol. 57, issue 7, 753-776

Abstract: It is standard practice to treat input-output (I-O) technical coefficients as fixed. The coefficients are fixed when $\sigma $σ, the elasticity of substitution, is zero, a restriction mostly not supported by 25 years of I-O tables for Australia. We offer a simple way of allowing for variable coefficients with a CES approach. Finally, using various values of $\sigma $σ in CGE simulations establishes that taking coefficients as fixed has misleading economic implications.

Date: 2025
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Working Paper: Are Input-Output Coefficients Really Fixed? (2023)
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DOI: 10.1080/00036846.2024.2305622

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