Note on the Differences in Accounting Identities between ‘Current Dollar’ and ‘Real’ Input–Output Tables

Abstract

A common error among uses of input–output methods is the conflation of the accounting identities of current dollar, double-entry input–output systems with the accounting properties of ‘real’ input–output systems designed to index physical flows. ‘Column’ sums of the sectoral technical coefficients of the former systems will sum to unity by construction, whereas column sums of the sectoral technical coefficients of the latter systems will not, in general, sum to unity. In this note, the differences in the accounting properties of the two types of input–output systems are detailed, both formally and with the aid of a numerical example.