The Problem of Negatives Generated by the Commodity Technology Model in Input-Output Analysis: A Review of the Solutions

Thijs ten Raa and José Rueda-Cantuche

Chapter 18 in Efficiency and Input-Output Analyses:Theory and Applications, 2021, pp 319-338 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Many economic models (e.g. computable general equilibrium models, econometric input-output models) revolve around a matrix of technical coefficients. However, these matrices can be estimated only once every 5 years as long as they are calculated from input-output tables and these are only published on a 5-year basis. Alternatively, use and make (or supply) tables are being regularly published on a yearly basis. However, they need to be converted into input-output tables as a previous step to form the matrix of technical coefficients. In doing so, this paper aims to shed light on the construction process of input-output tables and to guide economic modelers in making a decision on the way to make such conversion and how to deal with the subsequent problems, particularly with negative technical coefficients.

Keywords: Efficiency; Input-Output; Benchmarking; Performance Measurement; TFP; Environmental Policy Analysis; Mark-ups; Consumer Surplus; CES Demand; Linkages; Heckscher-Ohlin Trade Flows; Leontief (search for similar items in EconPapers)
JEL-codes: C67 D O12 (search for similar items in EconPapers)
Date: 2021
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Journal Article: The Problem of Negatives Generated by the Commodity Technology Model in Input–Output Analysis: A Review of the Solutions (2013)
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