An Economic Derivation on Trade Coefficients under the Framework of Multi-regional I-O Analysis

Bo Meng and Ando Asao

No 29, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: The gravity model, entropy model, potential type model and others like these have been adopted to formulate interregional trade coefficients under the framework of Multi-Regional I-O (MRIO) analysis. Since most of these models are based upon analogies in physics or on statistical principles, they do not provide a theoretical explanation from the view of a firm's or individual's rational and deterministic decision making. In this paper, according to the deterministic choice theory, not only is an alternative formulation of the trade coefficients presented, but also a discussion of an appropriate definition for purchasing prices indices. Since this formulation is consistent with the MRIO system, it can be employed as a useful model-building tool in multi-regional models such as the spatial CGE model.

Keywords: Trade coefficients; Multi-regional; Input-output tables; Armington assumption; Regional economic cooperation; Trade problem; 産業連関表; 域内経済協力; 貿易問題 (search for similar items in EconPapers)
JEL-codes: C67 C68 (search for similar items in EconPapers)
Date: 2005-05-01
New Economics Papers: this item is included in nep-geo and nep-int
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Citations: View citations in EconPapers (3)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 29. 2005-05-01

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