Input-output Tables Research Articles

Input-Output Analysis: Which Tax Incentive for Natural Resources Downstream Is Suitable for Indonesian Economy?

Indonesian government's policy to promote downstream natural resources leads to tax incentives policy intended to encourage the downstream. This study focuses on corporate income tax incentives in the form of net income reduction (tax allowance according to Article 31A of the Income Tax Law) by 30 percent for 6 years or corporate income tax reduction (tax holiday according to Minister of Finance Regulation Number 130/PMK.010 /2020) by 100 percent or 50 percent. Despite the positive or negative impact of tax incentives enactment argued in the previous studies, this study will calculate the impact on the economy provided by the mentioned tax incentive schemes quantitatively and will analyze which tax incentive scheme gives the greater impact on the economy. The analysis was carried out by using input-output analysis method to calculate the impact from output approach on secondary data in the form of the latest input output table released by Badan Pusat Statistik i.e., 2016 input output table. The result of the study shows that tax incentive in the form of tax holiday with income tax reduction by 100 percent provides greater impact on the economy than the others do. The total impact is getting greater and shows comparable results as the tax incentive rate increases. However, the result of this study implies that the implementation of tax incentives still needs the right tax incentive policy design to gain the expected results.

Measurement of Servitization Level of Manufacturing Industry based on Input-Output

To measure the servitization level of the manufacturing industry in Shaanxi Province and reveal the current situation of the servitization input and output. Based on the input-output tables of the whole country, Shaanxi provinces from 2002 to 2017, the direct consumption coefficient and the complete consumption coefficient are calculated to measure the input servitization level of Shaanxi's manufacturing industry and its subsectors. 56 listed manufacturing companies in Shaanxi Province were selected to measure the servitization level of manufacturing output in Shaanxi Province. The results show that from 2002 to 2017, the manufacturing industry in Shaanxi Province presents a development trend of seeking improvement in stability, but the development of servitization is slow, and the overall input servitization level is not high. The development among manufacturing industry and its subsectors is not balanced, and the gap of the input servitization level is large. The service import rate of manufacturing enterprises is not high, and the servitization level of manufacturing output is in the primary and intermediate stage. Based on those above, from the four points of policy support, optimizing the industrial structure, accelerating the integration and application of internet technology in the manufacturing industry and changing the traditional manufacturing concept, the corresponding suggestions to improve the servitization level of manufacturing in Shaanxi Province is put forward.

Ecological utility analysis of the Australian economic sectors based on embodied energy

The uncontrolled socioeconomic development through substantial consumptions and transfers of materials, energy and other natural resources plays a significant effect on the deterioration of the ecological environment. How to quantify these consumptions and transfers has been a difficult issue and attracted many researchers from various disciplines. The purpose of this research aims to reveal the ecological utility of the Australian economic sectors based on embodied energy. The research commences with the development of embodied energy input–output tables of Australia and then adopts the ecological network analysis (ENA) principles combined with the hypothetical extraction method (HEM) to investigate the interaction of sectoral embodied energy the economic system. A utility value matrix is used to determine the ecological relationship from one sector to another, the degree of mutualism of the entire economic system and its synergism, and the importance of a sector in the economic system. The ecological relationships of all pairs of economic sectors revealed from this research can be used to describe the Australian economic system from the perspective of embodied energy. The long-term development interests of various industries in Australia can be balanced and adjusted according to the positive and negative ecological relationship. The influence of the specific structure on the industry is measured by the connectivity and diversity of the energy network.

Unraveling the Interdependence of Inputs and Outputs in the Business Sector: A Case Study

This research project explores the application and utility of input-output analysis as a pivotal decision-making tool in the business sector. Input-output analysis (I-O) is a quantitative economic modeling technique that assesses the interdependencies among various sectors of an economy. Understanding the concept, application, strategic planning, and resource allocation within the input-output model facilitates effective decision-making in business operations. This project offers guidance for determining, analyzing, evaluating, and selecting across different business levels and sectors. The primary tool employed in the I-O process is the input-output analysis table. In this project, we utilize Leontief's model, specifically the open model, to determine the required resources to meet an increase in demand. Data collection methods for this research encompass data analysis, sample surveys, content analysis, business analysis, data preprocessing, and historical observations. It is important to note that this research project focuses exclusively on the business sector and its operational facets. Various businesses and their operations are examined to provide examples and insights into the implementation of I-O in the production sector. The chosen I-O model for this report is Leontief's model. Through the findings of this research report, it is evident that I-O can be effectively employed in the business sector to inform decisions related to inputs and outputs, promoting smooth economic progress. Ultimately, this project sheds light on the intricate interdependencies of inputs and outputs within the business sector.

Input-output Table and Input-output Model of Import and Export Internalization

Abstract This paper reviews the traditional input-output models and analyzes their potential problems and preliminary improvement research. According to the principle of the national economic accounting system, foreign departments are added in the first quadrant of the traditional input-output table. The biochemical input-output model of import and export solves the import and export problems that have plagued the input-output research, and integrates and expands the advantages of import tabulation matrix, MRIO and other tables and models. It has laid a solid foundation for correctly using input-output data to analyze national economy, regional economy and global economy. JEL classification numbers: E16. Keywords: Import, Export, Input-output Table, Input-output Model, Foreign Sector.

Rethinking Post-Pandemic Labor Policies: Insights from Precarious Workers in Indonesia

The current study aims at finding evidence of the impacts of economic shocks on the labor markets in Indonesia. Based on the findings, the study would like to revisit the feasibility of the current labor markets policy in the country that is currently moving towards labor market flexibility. To study the topic, this study used a dataset from the 2021 Inter-Regional Input-Output Table for East Java Province, Indonesia. In the analysis, econometric techniques were employed to: (i) identify vulnerable economic sectors to the economic shocks of the COVID-19 pandemic, (ii) determine the economic losses resulting from the reduction of outputs, and (iii) determine the impacts on the labor markets that resulted from the reduction in the final demand of the economic sectors. The findings of this study reveal that the sectors that had been most affected by the economic shocks are those that make a significant contribution to the gross domestic product and are heavily dependent on labor. Upon simulating the impacts of economic shocks on the labor markets, the labor-intensive service sectors are the most impacted and succeeded by labor-intensive manufacturing sectors and capital-intensive sectors. Hence, in opposition to the current labor markets policy, the findings suggest policymakers to adopt appropriate labor market policies that promote decent work while sustaining economic growth.

Young Duality for Variational Inequalities and Nonparametric Method of Demand Analysis in Input–Output Models with Inputs Substitution: Application for Kazakhstan Economy

The global macroeconomic shocks of the last decade entail the restructuring of national production networks and induce processes of input substitution. We suggest mathematical tools of Young duality for variational inequalities for studying these processes. Based on the tools we provide, a new mathematical model of a production network with several final consumers is created. The model is formulated as a pair of conjugated problems: a complementarity problem for optimal resource allocation with neoclassical production functions and the Young dual problem for equilibrium price indices on network products. The solution of these problems gives an equilibrium point in the space of network inter-industry flows and price indices on goods. Based on our previous results, we suggest an algorithm for model identification with an official economic statistic in the case of constant elasticity of substitution production functions. We give an explicit solution to the complementarity problems in this case and develop the algorithm of the inter-industry flows scenario projection. Since the algorithm needs the scenario projection of final sales structure as its input, we suggest a modified methodology that allows the calculation of scenario shifts in final consumer spending. To do this, we employ the generalized nonparametric method of demand analysis. As a result, we develop new technology for scenario calculation of a national input–output table, including shifts in final consumer spending. The technology takes into account a substitution of inputs in the network and is based on officially published national statistics data. The application of the methodology to study tax collection scenarios for Kazakhstan’s production network is demonstrated.

Economic Insights Unveiled: A Journey through Input-Output Analysis in Non-Linear Mathematics

This project work explores the world of input-output analysis, a powerful economic tool that reveals the complicated web of economic interdependencies that exist within a region or nation. By meticulously exploring the foundations, applications, and implications of this analytical method, we set out on a journey to understand the profound impact it has on economic systems. The project begins with a comprehensive introduction to the theory of input-output analysis, shedding light on its historical evolution and underlying assumptions. It meticulously outlines the step-by-step process of constructing input-output tables and interprets the matrix algebra involved, ensuring that even a novice can grasp the fundamentals. Two hypothetical case studies add practicality to the project, vividly demonstrating how input-output analysis can be applied to real-world scenarios, such as the infrastructure sector, the energy sector, and local economic development. Through these case studies, we witness the transformative potential of this analysis, both in terms of economic growth and sustainable practices. Furthermore, the project explores the strengths and limitations of input-output analysis, paving the way for informed discussions and decisions in the realms of economic policy and planning. In the end, the project leaves no stone unturned, presenting a comprehensive view of input-output analysis as a dynamic instrument that empowers us to unravel economic intricacies, fostering a prosperous and sustainable future.

Towards a low-carbon future for China’s power supply chain: Critical sectors identification and scenario analysis

The power sector is a significant contributor to global carbon emissions and has received widespread attention from scholars; however, the path to achieving supply chain-wide carbon reductions in China from a provincial perspective remains unclear. This study combined multi-regional input–output and betweenness-based methods to identify the critical upstream sectors that indirectly drive large amounts of carbon emissions through power supply chains. The point source data of coal-fired units were collected to ensure the accuracy of the disaggregated input–output table. In addition, a scenario analysis was conducted to examine the effects of different electricity policy combinations on supply chain-wide emissions during the 14th Five-Year Plan (FYP). Our findings indicate that the embodied carbon intensity of the coal-fired power sector in Northwest China is among the highest in the country, ranging from 36.39 to 82.10 tons/10000 CNY. Therefore, the shift of the power sector to Western China during the 14th FYP will partially offset the positive emission reduction effect of the structural transformation of the power system. To achieve a low-carbon power supply chain, it is necessary to improve the production efficiency of critical transmission sectors and the low-carbon technology levels of major emitting sectors. Our results provide valuable insights for provincial governments to plan low-carbon transformation paths for the power sector.

High-frequency sectoral carbon and environmental analysis based on monthly input-output tables compilation during 2018–2021

This paper proposes a process for updating monthly input-output tables with monthly macroeconomic statistics and published input-output tables. Reasonable assumptions are set up and 48monthly input-output tables are prepared from 2018 to 2021 with the combination of the row range series method and nonlinear mathematical planning. The Weaver-Thomas composite index is used to analyze the role of the sector in the economic network, and the sectoral correlation indicators are used to analyze the correlation change of the sector's monthly electricity emissions to show an environmental application effect of the monthly input-output table. The results show that the monthly input-output tables can be prepared with acceptable accuracy, and they can reveal the sectoral network structure changes and sectoral carbon emissions changes in continuous monthly time series. The proposed approach contributes for the compilation of high-time-frequency input-output tables, so as to support high-frequency industrial environmental impact analysis.

Carbon Substitution Effect Through the Utilization of Wood Products in Major Carbon-intensive Industries: Focusing on the Construction Industry in Korea

This study aims to examine the carbon substitution effect in Korea's major carbon-intensive industry, the construction industry. To accomplish this, we estimate the factor demand functions for the building construction and maintenance industry as well as the civil construction industry using the SUR model. Subsequently, we conduct a simulation analysis to assess the carbon substitution effect resulting from the replacement of wood with other factor inputs in each industry. The data utilized in this study are gathered from the Bank of Korea's Input-Output table and the Bank of Korea's producer price index. The estimated results of the factor demand functions reveal a substitutive relationship between wood and wood products with processed metal products within the construction industry. The simulation analysis indicates that an 8.75% increase in demand for wood and wood products within the construction industry can lead to the most significant reduction in total greenhouse gas (GHG) emissions for the industry, amounting to 277.52 thousand tons. This study is the first to quantify carbon substitution effects from an economic perspective, thereby contributing to providing insights for governments in formulating policies related to carbon neutrality.

부동산 산업의 경제적 파급효과와 충격반응 분석

This study examines the effect of the real estate industry on other industries as input and output resources. We define the real estate industry based on the two- and three-digit industry classification system as the recent real estate industry expands into other interdisciplinary business sectors. We also aggregate the sub-sector of the real estate-related industry into the broad real estate-related industry. We analyze input-out tables to find the spillover effect and value chain to other related industries by utilizing a total of 17 annual industry input-output tables from the Bank of Korea. This study also extends the spillover effect of the real estate industry along with a fluctuation of macroeconomic conditions. We find that the magnitude of the economic effect of the real estate industry on other industries is large when we classify the real estate industry into the two-digit industry classification system except for the analysis of the additive value impact. We also examine the impulse response analysis (IRA) by utilizing vector autoregression analysis. IRA indicates that macroeconomic variables affect the real estate industry and drive the same directional spillover effect on other industries. Our analysis segregates the national input-output analysis into the regional input-output analysis to identify the economic effect of real estate market fluctuation of the Seoul Metropolitan Area on other regions.

Economic evaluation of MSY-based fishery policy using input-output table: A case study of squid-related industries in Hakodate City, Japan

This study evaluates the regional economic impact of the MSY-based fishery policy on the squid industry, specifically in case of the Japanese flying squid (Todarodes pacificus) in Hakodate-city, Hokkaido Prefecture by coupling ecological-economic modeling. The results show that a 10-year MSY-based squid fishery in Hakodate would have an economic ripple effect of approximately −0.085 billion JPY in the case of normal recruitment, and 0.061 billion JPY in the case of low recruitment both in the present value with 4% annual discount rate. In the viewpoint of percentage, they are less than 0.3% of the economic ripple effects of the conventional fisheries, which indicates that the economic impact of MSY-based fisheries is not that significant. In addition, the decreased catch values during the first five years are so huge that the total present value of the MSY-based fishery is negative in the normal recruit scenario. This suggests that MSY-based fisheries are effective in dealing with the risks of low recruitment and requires long perspectives on policy implications. This study also recommends high-level bilateral dialogue between Japan and China on squid fishery management to decrease the uncertainty on the stock assessment.

Industrial Chain Map and Linkage Network Characteristics of Digital Economy

The development of the digital economy in the modern era significantly embodies a country’s comprehensive strength. This paper uses the data from China’s 2012 and 2017 input-output tables to analyze the linkage structure between the digital economy industry and other industries using the average propagation length model and social network analysis. The Weaver–Thomas model was used to obtain the industrial linkage matrix and network characteristics. An industrial chain map of the digital economy was depicted as the core. This paper is of practical significance in depicting the industrial chain structure and network characteristics, understanding the position of digital economy industry in the economic system and promoting the integrated development of the digital economy and traditional manufacturing industries, which allows them to incorporate the new generation of technology and industrial transformation with the digital technology as the core to promote their transformation and upgrading.

The impact of the digital economy on inter-city carbon transfer in China using the life cycle assessment model

The haven paradise hypothesis has been widely supported in the international carbon transfer, but there is still a lack of inter-city evidence. The emergence of the digital economy in recent years has introduced unprecedented opportunities and challenges for carbon emissions reduction and carbon transfer. As the world’s largest carbon emitter and a major player in the digital economy, exploring whether the pollution haven hypothesis exists among cities in China and how the digital economy affects inter-city carbon transfer is crucial for countries to optimize their domestic carbon reduction structures. To this end, this paper employs the 2012 and 2015 Chinese Urban Household Survey data alongside input-output tables based on the life cycle assessment method to quantify the inter-city carbon transfer. In addition, the impact and mechanisms of the digital economy on inter-city carbon transfer are explored using the two-way fixed effects model. The results show that 54% of Chinese cities’ carbon emissions come from outside, with third-tier cities bearing high carbon transfer pressures, indicating the presence of the pollution haven hypothesis. The digital economy exacerbates inter-city carbon transfer by promoting market integration and facilitating industrial transfer, and it mainly promotes the transfer of high-intensity carbon emissions to third-tier cities. Considering carbon emission reduction targets, mandatory environmental regulations have strengthened the effect of the digital economy on carbon transfer. Therefore, the Chinese government needs to properly address carbon transfer by improving the collaborative carbon reduction system, enhancing carbon emission reduction efficiency, and accelerating the equitable progress of the digital economy.

Hungary's inflationary exposures to global price movements

AbstractThis paper investigates Hungary's inflationary exposures to global price movements using a simple cost-push input-output price model and a database of inflation-to-output price elasticities (Global Inflation-to-Output Price Elasticity Database, GIOPED) developed on the basis of the OECD's Inter-Country Input-Output Tables. Inflation elasticities are decomposed into local, simple, and complex global value chain effects by applying Wang's decomposition scheme (Wang et al. 2017) to price movements and inflation. Our empirical analysis based on GIOPED elasticities shows that Hungary is highly exposed to global value chain price transmissions originating in Germany, Austria, and Russia; and in particular to changes in energy prices. The crude oil and natural gas price boom and the resulting energy crises caused a significant increase in consumer price levels in Hungary; however, this explains only a fraction of current inflation rates.

War and Peace: Structural changes in the U.S. industries 1939–1958

In his memoir published in 2002, George Dantzig, who had invented the simplex algorithm to solve linear programming problems, praised Wassily Leontief as a great pioneer for proposing a large but simple matrix model that represents the interindustry input-output structure of an economy. Input-output tables, which depict the transactions of goods and services between industries, have been intensively used to prepare the U.S. economy for World War II, and to eventually liberate Europe. This paper not only revisits the early development of structural analysis but also applies it to the 1939, 1947 and 1958 U.S. input-output tables using triangulation and dispersion indices as fundamental tools. The degree of integrity represented in the Leontief inverse significantly increased as the division of work progressed in the time of war to achieve maximum productivity. The structural changes ensured a smooth transition of the American economy from peacetime to wartime, and later, the fast rebuilding of European economies that had been completely devastated during the war.

Matrix multipliers, demand composition and income distribution: Post‐Keynesian–Sraffian theory and evidence from the world's ten largest economies

AbstractThis paper builds and explores in detail a post‐Keynesian–Sraffian one‐country model of effective demand, which, on the one hand, extends the Kurz multiplier model to open–with state‐economies of single production and, on the other hand, is applicable to data from the National Input–Output Tables of the World Input–Output Database. Thus, it estimates the net output, import and employment matrix demand multipliers for the world's 10 largest economies. The overall findings provide general support for and new insights into Sraffian theoretical and policy arguments: (i) the multiplier effects depend heavily on the physical composition of autonomous demand; (ii) the incremental share of wages in net national income can move in either direction with an increase in the savings ratios out of wages and profits and/or the corresponding direct tax rates; (iii) there is, in general, no one‐to‐one correspondence between alternative tax–transfer policies and their multiplier effects; and (iv) there is not necessarily an inverse relationship between the overall level of the profit rate and the multiplier effects or the wage share.

Study of Leading Sector in the Economy in South Kalimantan Province through the IO Model Approach

The economy of South Kalimantan Province is currently still dependent on the mining and quarrying sector, especially in the coal mining sub-sector. This produces an excessive dependency on the global economy, where commodity price volatility has a very significant impact on the regional economy. This study aims to determine the leading sectors in South Kalimantan Province. This study uses an Input-Output table analysis of South Kalimantan Province in 2016 with 52 sector classifications. Based on the calculation of the power of dispersion index and the degree of sensitivity index, there are four categories in determining the sectors, namely; leading sectors (priority I), strategic/potential sectors (priority II and III), and lagging sectors (priority IV). The results indicate that there are 12 economic sub-sectors which categorized as leading sectors, namely; Electricity, Food and Beverage Industry, Livestock, Timber Industry, Industry of Wood, Goods made of Cork and Woven, and Goods from Bamboo, Rattan and its kind, Rubber Industry, Rubber and Plastic Goods, Non-Metal Excavated Goods Industry, Construction, Information and Communication, Warehousing and Services Transportation Support, Post and Courier, Coal and Lignite Mining, Other Financial Services, Chemical Industry, Pharmacy, and Traditional Medicine. For other priorities, there are 12 strategic/potential sectors as priority II, 7 strategic/potential sectors as priority III, and 21 lagging sectors as priority IV.

Regional economic analysis of major areas in South Korea: using 2005–2010–2015 multi-regional input–output tables

South Korea’s Seoul metropolitan area accounts for more than half of the country’s GDP and population. This phenomenon is exacerbating annually. Regions outside the metropolitan area of Korea are not only decreasing in terms of economic size, but are also becoming more dependent on the metropolitan area in terms of economic structure. Earlier, the metropolitan area was based on the service industry, while other regions had a large manufacturing sector; however, the size of the latter also increased in the metropolitan area over time. To analyze dependence on the Seoul Metropolitan area, this study conducts regional production inducement effects, regional division of labor, and three regional structural decomposition analyses using Korea’s 2005–2010–2015 multi-regional input–output table (MRIO) to further analyze dependence on the metropolitan area. Furthermore, this research integrates industry classification and realizes the price level of input–output tables to link 3 years of MRIO in three industries: wholesale and retail trade and product brokerage services, motor vehicles, semiconductors, and other electronic components. From the inter-regional production inducement effect, the relation between the metropolitan area and each region is calculated using the regional export and import effects of each region. Furthermore, the proportion of metropolitan areas in major industries and their changes are measured through regional division of labor, and through multi regional structural decomposition analysis, the growth factors of each region over 10 years are determined by own region, metropolitan area, and other regions.