Abstract
Input-output tables can be presented in different formats, according to three main criteria: 1) symmetric or rectangular format; 2) total or domestic-use flows and 3) valuation prices (basic prices – bp or purchasers’ prices – pp). Official National Accounts (at least in EU) produce in a regular base a total use rectangular table at pp – also known as the Make and Use (M&U) format – that is different from the lay-out upon which traditional input-output models were developed (domestic use, symmetric, bp). The problem with this latter one is of course that it is only available at times in many countries. The objective of this paper is to prove (under common hypotheses) the equivalence between two alternative procedures, from the point of view of the results of an input-output model: 1) to convert the M&U input-output table into the traditional format – a domestic-use symmetric table at bp – and then implement the model; 2) to perform the direct modelling of the original table (the total-use rectangular table at pp). That equivalence is illustrated with Portuguese data for the year 2002.
Highlights
Input-output tables can be classified according to three main criteria: 1) symmetric or rectangular format; 2) total use or domestic use flows and 3) valuation of goods and services
It will be shown that the direct modelling of the rectangular Make and Use (M&U) matrices, with total use flows and at pp, that adopts a framework that is equal or very close from the official statistics, is exactly equivalent to the modelling of a domestic flow symmetric table, when it is derived from the former one, using similar assumptions
After computing the two sets (ITA and commodity technology assumption (CTA)-based) of M&U multipliers, we have to derive as well the product-by-product and the industry-by-industry domestic-flow symmetric tables valuated at bp, in order to allow for the comparison of the two kinds of the multipliers
Summary
Input-output tables can be classified according to three main criteria: 1) symmetric or rectangular format; 2) total use or domestic use flows and 3) valuation of goods and services. Current input-output tables may involve two different price systems: basic prices (bp), the closest to the value of production factor costs, or purchasers’ prices (pp), which include taxes on the products (deducted from subsidies) and trade and transport margins. 2. Input-output modelling based on a M&U matrix, with total use flows, at purchasers’ prices. We deal with the rectangular or M&U model, with total-use flows, at purchasers’ prices (pp) – as it is a less well known procedure of implementing an input-output model –, in order to demonstrate how it can de be directly modelled, avoiding its previous transformation in a symmetric matrix of domestic flows at basic prices (bp). This system may be manipulated in order to the outputs vector:
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