Abstract
This paper develops a conceptual foundation for temporal input-output, reviews the experiences in the area and looks at its potential, particularly for small region modeling. Finally, a particular dynamic input-output model is described and examined in light of this conceptual foundation.
Highlights
Since the early experimentations with inputoutput analysis (Leontief, 1936, 1941), numerous variations have been offered
Another issue is related to the appropriate ness of input-output analysis to small versus large economies
Are there conceptual or empirical arguments which favor the application of this tool to economies of a particular size?
Summary
Since the early experimentations with inputoutput analysis (Leontief, 1936, 1941), numerous variations have been offered. The equilibrium conditions are a timeless, instantaneous function of the actual circumstances at a point in time whereas the disequilibrium relationships involve lags, rates of change, and other temporal functions Together those features of the static model-its partiality, its timelessness and its equilibrium nature-distinguish it from the ideal dynamic input-output model.As Leontief has pointed out, progress toward this ideal can only be partial since the list of hypothetically relevant determinants of structural change in clude many which "will remain beyond the reach of the empirical investigator for a long time to come" (1953, pp.). This paper describes a model which incorporates some of Leontief's suggestions, as well as other features which make it a dis equilibrium model This disequilibrium feature is achieved by amending the balance equations to allow for short term imbalances between the rates of production and demand.
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