Singularity of Input-Output Matrices: Structural Linkages and Spectral Properties

Mohit Arora and Deepankar Basu

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Abstract: Analyzing 5 historical and 670 contemporary input-output (IO) tables, we show that all of these IO matrices are singular. We map this phenomenon onto underlying production network topologies. While singularity trivially emerges from sectors lacking intermediate forward or backward linkages, it could frequently persist due to deeper economic properties: proportional cost structures across sectors, isolated economic sub-networks, and supply-chain hierarchies lacking intra-industry transactions. As a subset of these matrices is non-diagonalizable, we leverage this singularity to derive simple, rank and eigenvalue based diagnostic criteria for diagonalizability. This provides an efficient computational test for network shock propagation models using eigendecomposition.

Date: 2022-07, Revised 2026-08
New Economics Papers: this item is included in nep-hme and nep-net
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