Open Leontief Model Research Articles

Integrated open Leontief model for analysis of biomass pellet demand in Thailand

This study addresses the critical challenge of sustainably meeting the growing demand for biomass pellets in Thailand, particularly in light of increasing global interest in renewable energy sources. By introducing an innovative approach through the integration of the Open Leontief Model, this research constructs Input-Output Tables (IOTs) specific to the biomass pellet sector, encompassing 180 economic sectors. The study evaluates the economic impacts of varying domestic and international demand scenarios on Thailand’s economy. Utilizing mass and energy balance methodologies, it provides a comprehensive analysis of the biomass pellet supply chain, from plantation to pelletization, for both corn and wood pellets. Findings reveal significant economic intersectoral linkages within Thailand's economy, indicating the biomass pellet sector's potential to substantially contribute to national renewable energy targets and reduce fossil fuel dependency. Notably, the sector is projected to require an increase in raw materials, energy, and other inputs by 3.8% in 2024 and 2.63% in 2036, following the trend of international biomass pellet demand. Additionally, employment in the sector is expected to increase by 3.8% annually under international demand scenarios and 4.6% annually under domestic and international demand scenarios. The research concludes with policy recommendations aimed at fostering sector growth, emphasizing the importance of government incentives, capacity building, and the establishment of biomass plantation communities to meet the increasing demand for biomass pellets. This study not only sheds light on the sector's current state but also charts a path forward for sustainable energy solutions in Thailand in line with Sustainable Development Goals 7, 8, and 9. Together, these initiatives aim to ensure a balanced transition toward renewable energy, benefiting both the economy and the environment.

Greenhouse Gas Emission Estimation Using Extended Input–Output Tables for Thailand’s Biomass Pellet Industry

Greenhouse gas (GHG) emissions from Thailand’s biomass pellet production were comprehensively assessed, with a specific focus on wood and corn pellets. Employing the extended input and output tables, the anticipated economic and environmental effects of the rising demand for biomass pellets within the Asia–Pacific Economic Cooperation region, which is projected to see an increase exceeding 33% by the year 2050, were investigated. The estimations of CO2, CH4, and N2O emissions, which were conducted utilizing an open Leontief model based on the 2015 National Input–Output Tables, covered each stage of the production process. The results show that emissions from the production of corn pellets are expected to rise steadily, from 52.91 MtCO2e in 2022 to 75.77 MtCO2e by 2030, whereas emissions from wood pellet production are set to increase more substantially, from 210.30 to 301.18 MtCO2e within the same timeframe. Data derived from surveys and interviews with corn farmers and wood pellet manufacturers informed the lifecycle data for the biomass pellet supply chain from cradle to gate. The findings suggest that Thailand’s power sector could benefit significantly from the biomass potential in the northern part of Thailand, which boasts an estimated energy content of corncob at 39 ktoe (0.0016 TJ). Market demand scenarios were explored in two forms: one where it was assumed that all biomass pellets are to be exported to Japan and South Korea, expecting a combined demand of approximately 560,262 tons by 2030, and another positing that 10% of production will be reserved for the domestic market, with a forecasted annual increase of 10% from 2020 to 2050. This paper highlights the need to prioritize low-emission renewable energy sources, expand technologies with lower lifecycle emissions, optimize the biomass supply chain to enhance efficiency, and introduce sustainable energy practices. The detailed GHG emissions analysis provides critical insights for policy formulation, underscoring the importance of sustainable transitions in the context of increasing biomass demand.

A downscaled economic model validated and applied to sediment management projects in Ireland and Scotland

PurposeThis paper presents a regionally downscaled economic model developed to assess the impacts of the management of dredged sediments on Gross Domestic Product (GDP) and jobs created; the model is validated and applied using real project data from sediment management projects in Ireland and Scotland. The model provides significant insight into and allows impact analysis for the economic aspect of sediment management projects with the potential to facilitate and inform stakeholders across the sediment management sector.MethodsThe economic model facilitates regional analysis of the impacts of sediment management projects on GDP and job creation for direct, indirect and induced effects. Methods for estimating the economic induced impacts are based on industry-specific type I and type II economic multipliers and coefficients, derived for the EU Interreg SURICATES partner countries (Ireland, Scotland, France and the Netherlands) using symmetric input–output tables and application of the open Leontief model and based on available economic data for the identified countries.The model is applied to sediment management projects in Ireland (a harbour development project at Castletownbere) and in Scotland (a bioremediation project at Falkirk). Model results are compared to project data for direct contribution to GDP and direct jobs created, and the model also estimates the indirect and induced economic project impacts. The model has been applied to undertake sensitivity analyses and compare different sediment management options.ResultsModel results provide a satisfactory comparison to real project data for direct cost and jobs created. Indirect economic benefits for GDP and employment created were estimated from 47 to 53% of direct impacts. The model has been applied to undertake sensitivity analyses and assess a range of different site-specific sediment management options with indirect economic impacts ranging from 42 to 53% of direct impacts.ConclusionsThe economic model results are compared to real project economic data, the validation exercise proving satisfactory with promising results. Sensitivity analyses and site-specific sediment management options have been assessed. The positive economic impacts of the Castletownbere Harbour project in particular are evident. These results highlight the potentially different economic impacts of the implementation of different sediment management options and in different regions and countries.The model allows the quantification of the economic benefits of sediment management projects. The model provides significant insight into and allows impact analysis for the economic aspect of sediment management projects and has the potential to facilitate and inform stakeholders and decision-makers across the sector.

Carbon Emissions from Fuel Combustion in the Economy of the State of Minas Gerais, Brazil (2005-2016)

The article assesses carbon emissions from fuel combustion in the economy of the Brazilian State of Minas Gerais between 2005 and 2016. An open Leontief model with hybrid units and incorporation of an energy sector was built using available input-output matrices and energy flows by economic sector. Overall, “Transport, storage, and mailing”, “Petroleum derivatives and ethanol”, and “Metallurgy” remained as the most relevant sectors in terms of emissions. Total and distributive impacts decreased between 2005 and 2013, with a trend reversal between 2013 and 2016. In addition to these sectors, “Mining” and “Agriculture, forestry and logging” were significant sources of emissions embedded in exports. A reduction of approximately 20% in sectoral average and aggregate emission requirements was observed, despite the substantial growth of the economy of the State in the period. There were decreasing returns to such gains, which, alongside the trend reversal at the end of the period, point to the role of specific macroeconomic factors in the observed outcomes and the need for new initiatives to curb emissions in the future.

Water Flows in the Spanish Economy: Agri-Food Sectors, Trade and Households Diets in an Input-Output Framework

Seeking to advance our knowledge of water flows and footprints and the factors underlying them, we apply, on the basis of an extended 2004 Social Accounting Matrix for Spain, an open Leontief model in which households and foreign trade are the exogenous accounts. The model shows the water embodied in products bought by consumers (which we identify with the Water Footprint) and in trade (identified with virtual water trade). Activities with relevant water inflows and outflows such as the agrarian sector, textiles, and the agri-food industry are examined in detail using breakdowns of the relevant accounts. The data reflect only physical consumption, differentiating between green and blue water. The results reveal that Spain is a net importer of water. Flows are then related to key trading partners to show the large quantities involved. The focus on embodied (or virtual) water by activity is helpful to distinguish indirect from direct consumption as embodied water can be more than 300 times direct consumption in some food industry activities. Finally, a sensitivity analysis applied to changes in diets shows the possibility of reducing water uses by modifying households' behavior to encourage healthier eating.

Water Consumption Based on a Disaggregated Social Accounting Matrix of Huesca (Spain)

SummaryMaking use of the social accounting matrix (SAM) of the Spanish province of Huesca in 2002, updated following Junius and Oosterhaven's GRAS method and work by Lenzen and colleagues, we have estimated the water footprint of the region. The water footprint is defined as the volume of water needed for the production of the goods and services consumed by the inhabitants plus the direct consumption in the households. We built an open Leontief model, which gives us the water embodied in the production of goods. The valuations concern the industrial, service, and domestic sectors’ water consumption, the embodied water imported from and exported to other countries, and the agrarian water use. This agrarian sector, clearly the sector that shows the greatest water consumption, is carefully examined, so it is disaggregated for the calculations into 31 irrigation land products, dry land, and 9 livestock classifications. As a consequence, the framework enables the observation of the relationships and flows of water taking place among all the sectors and activities in the economy. Finally, we also make use of the per capita water footprint estimations to get a clear picture of how the responsibility for water use is distributed once foreign trade is taken into account.

Hierarchical open Leontief models

We study the concept of a nonnegative matrix inducing hierarchies and apply it to the nonnegative input–output matrix of the open Leontief model, leading to properties which are stronger than the feasibility of the model. We show some examples of these matrices. The characterization of nonnegative matrices inducing hierarchies for any permutation of indices leads to certain matrices of class M(x).

A Subsidy-Surplus Model and the Skorokhod Problem in an Orthant

We consider the deterministic Skorokhod problem in an orthant of the form [Formula: see text] with (Yw)i(·) nondecreasing, and (Yw)i(·) not increasing while (Zw)i(·) > 0. This can be viewed as a subsidy-surplus model in an interdependent economy. Existence of a unique solution is established under fairly general conditions (viz. with R(·, ·, ·) satisfying a uniform spectral radius condition). Comparison result for (SP) vis-a-vis the usual partial order on the orthant is studied; we show that the more “inward looking” the reflection vectors and the drift, the larger the values of Yw will be but the values of Zw will be smaller. In addition to showing that the Leontief-type output is a feasible subsidy, connection between (SP) and “minimality” of feasible subsidies is discussed (consequently it is suggested that (SP) may be taken as a continuous time feedback-form analogue of open Leontief model). In the stochastic case, (Y(t), Z(t)) turns out to be a strong Markov process if w(·) arises from aLevy process. Relevance of the comparison result to recurrence/positive recurrence of Z(·) process is pointed out.

Price-endogenized Input–Output Model: A General Equilibrium Analysis of the Production Sector of the Japanese Economy

This paper considers a generalization of the open Leontief model, by endogenizing the input coefficients on the basis of the neoclassical multi-sectoral produc-tion function. The adopted production function is of the two-level CES type, which is quite effective for avoiding the multi-collinearity problem. As a result, the estimates obtained are quite stable, satisfying the quasi-concavity conditions of the production function for all the sectors. Comparative statics based on the Jacobian of the excess supply function for each commodity market reveal that, owing to the factor substitution the effect of an increase in the final demand on the level of the production is significantly smaller than that which occurs in the open Leontief model with fixed input coefficients.

Implications of Full Capacity Utilization of Manufacturing Sector in Indian Economy

This paper estimates the implications of full capacity utilization of manufacturing sector in Indian economy using the I-O framework. The study is carried out using the open Leontief model and also the semi-closed model endogenizing household demand. The working of the above models are illustrated using 1973-74 data. By fully utilizing the capacity of the manufacturing sector the output, income and employment increases by 22.86, 16.31 and 14.11 per cent respectively in open model and will increase by 38.68, 37.08 and 38.59 per cent in the semi-closed model. The output elasticity for the economy is 0.4048 and 0.6849 in open and semi-closed model respectively. The sectors 'mining and quarrying', 'banking and Insurance' and 'electricity' show high output elasticities.

Two-minor stable matrices and the open Leontief model

Two-minor stable matrices are square matrices such that all (2,2) minors with no elements on the main diagonal are zero. The effects of taxes and subsidies on the competitive prices of output in Leontief's input-output model are examined by e.g. Metzler, Allen and Atsumi. We reexamine these studies and give results under more “normal” assumptions. Using two-minor stable matrices, the question is answered under what conditions the prices of the nontaxed and nonsubsidized goods do not change.

Non-negative matrices: The open Leontief model

The consequences of arbitrary changes of the final demand vector for the gross production vector in the open Leontief model are studied, and several properties of non-negative irreducible square matrices are obtained.

Criteria for Aggregation in Input-Output Analysis

FROM the early days of input-output analysis its practitioners have recognized the importance of the aggregation problem and the fact that the results of the analysis depend upon the particular aggregation procedures used to combine industries. Recently, an increasing number of writers have become interested in theoretical as well as practical aspects of the problem.' The potential user of input-output analysis often needs to reduce a given table to smaller size. table say 200 by 200 or even 50 by 50is cumbersome for many purposes. The theorist finds it too detailed to understand, and the forecaster finds it too extensive to use in making further numerical computations. Of course some information is always lost by aggregation. But the considerations that lead to the computations of averages and index numbers also lead to the consolidation of inputoutput tables: ease of comprehension and economy of manipulation. The following question has been posed in the literature: 2 given a detailed input-output table in which many industries appear, and given the desire of the research worker to have only a few large industries to deal with, when is it possible to consolidate the small industries into industries, and still obtain the results of the analysis or predictions as would have been obtained by using the many small industries in the first place? The answer to this question has been shown to be almost never. The special cases where it is possible have indicated the type of conditions needed for what might be called good aggregation procedures meaning procedures which give approximately the same results as given by the detailed model. The need to develop criteria for good aggregation has been recognized, but few specific suggestions have been made.3 The purpose of this paper is to suggest specific criteria and procedures for good aggregation of a given input-output table. First, reasonable criteria are developed, based on the usual objectives of input-output analysis and on some special assumptions concerning final demand. Some approximations to these criteria are then proposed that are closely related to previous suggestions to aggregate on the basis of similarity of coefficients or homogeneity of input structure. The criteria are then illustrated and the usefulness of the approximations tested by numerical experiments involving a * The author gratefully acknowledges the assistance given him by the Social Science Research Council, which awarded him a Faculty Research Fellowship; the Bureau of Research of Kansas State College; Professor William A. Neiswanger, of the Department of Economics of the University of Illinois; Professor Thomas E. Hull, of the Department of Mathematics of the University of British Columbia; Patricia Kollman, graduate research assistant in the Department of Economics and Sociology of Kansas State College. 'J. B. Balderston and T. M. Whitin, in the Input-Output Model in Oskar Morgenstern, ed., Economic Activity (New York, I954), 79-I28; Tibor Barna, and in Input-Output Analysis in Tibor Barna, ed., The Structural Interdependence of the Economy (Proceedings of an International Conference on Input-Output Varenna, I954), ch. 7; John C. H. Fei, A Fundamental Theorem for the Problem of Input-Output Analysis, Econometrica, xxiv (October I956), 400-I2; M. Hatanaka, Note on Consolidation Within a Leontief System, Econometrica, xx (April 1952), 30I-303; Mathilda Holzman, of Classification and Aggregation in Wassily Leontief, ed., Studies in the Structure of the American Economy (New York, I953), ch. 9; John McCarthy, in the Open Leontief Model (paper presented to the Econometric Society at Cleveland, Ohio, December 1956); M. McManus, General Consistent in Leontief Models, Yorkshire Bulletin, vIII (June I956), 28-48; Edmond Malinvaud, Problems in Input-Output Models in Tibor Barna ed., op. cit., ch. 8; Oskar Morgenstern and Thomson M. Whitin, Comments in National Bureau of Economic Research ed., Input-Output Analysis: An Appraisal (Studies in Income and Wealth, Vol. i8, Princeton, I955), I28-35; Herbert A. Simon and Albert Ando, of Variables in Dynamic Systems (paper presented to the Econometric Society at Cleveland, Ohio, December I956); H. Theil, Linear in Input-Output Analysis, Econometrica, xxv (January I957), III-22. 2See works cited of Balderston and Whitin, Hatanaka, Malinvaud, McManus, Theil. 3Some preliminary suggestions have been made by McCarthy and by Simon and Ando in their papers cited.