A dynamic input-output model for investigating alternative futures: Applications to the South African economy

Abstract

In this article the structure of a dynamic input-output model is developed. Using available time-series data for the South African economy, the model is adapted to describe trends and structural changes that have occured over the past few decades. The model is used to describe the economic consequences of continuing existing trends as well as of possible changes in trends. Conditions for increasing or decreasing economic growth and the supply of consumer goods are investigated. The effects of changing technology as reflected by changing capital/output ratios and input-output coefficients are explored. Model simulation runs indicate that under certain conditions it may be possible to decrease overall economic growth and reduce consumption of resources by considerable margins without reducing the supply of consumer goods.