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On the consistency of commodity-based technology in the Make-Use model: a new interpretation

Louis de Mesnard ()

No 2001-05, LATEC - Document de travail - Economie (1991-2003) from LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS UMR 5118, Université de Bourgogne

Abstract: Most national accounting systems are based on the Make-Use model. Two hypotheses are traditionally made featuring either industry-based (IBT) or commodity-based (CBT) technologies. IBT corresponds to a consistent demand-driven model: its solution can be explained as a circuit or in probabilistic terms, even in the rectangular case. CBT obliges to compute an inverse matrix which is impossible when rectangular, fails to indicate how a commodity is distributed throughout industries and precludes interpretation of CBT as a circuit or in probabilistic terms. CBT should be interpreted as supply-driven to recover its coherence as a circuit even in the rectangular case.

JEL-codes: C67 D57 (search for similar items in EconPapers)
Date: 2001-03
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Published : “Understanding the shortcomings of commodity-based technology in input-output models: an economic-circuit approach”, Journal of Regional Science, 2004, 44, 1, 125-41.

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