European Regional Science Association
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European Regional Science Association
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The abstract for paper number 525:
Geoffrey Hewings, Prof., Urbana, Illinois, USA, Michael Sonis, Bar-Ilan University, , Israel
New developments in Input-Output Analysis: Fields of Influence of changes, Temporal Leontief Inverse and the renovation of the classical Key Sector Analysis
In this paper the new dynamic approach to the classical Leontief Input-Output Analysis is elaborated, based on rejection of the assumption of the constancy of the direct inputs. The presentation builds on earlier work (Sonis and Hewings, 1989, 1991, 1992) that examined a variety of issues surrounding error and sensitivity analysis, decomposition and inverse important parameter estimation. These ideas are now brought into a general form as a basis for a more complete, general fields of influence approach which is the main vehicle for describing the overall changes in economic relationships between industries created by combinations of changes in technological coefficients. The most important new concept based of the notion of the direct fields of influence is the multiplier product matrix and the corresponding artificial economic landscape which represent the classical Key Sector analysis and hierarchies of sectoral backward and forward linkages. The multiplier product matrix is the main part of the fundamental minimal information decomposition of Leontief inverse in the form of the difference between the global presentation of direct effects of the changes in inputs coefficients and the synergetic effects of the overall interaction of the changes. The new Temporal Leontief inverse is constructed which can serve as the basis for temporal analysis of an evolving input-output system: the inverse depends on its evolutionary tail of changes in a highly non-linear manner. The detailed analytical structure of the Temporal Leontief inverse addresses the possibilities of tracing the impact of each change in the individual direct inputs in each time period through to the final state of the economy. The presented analytical technique gives the basics of the new perturbation theory for matrix inversion. KEYWORDS: Dynamic Input-Output Analysis; Coefficient change, Fields of Influence of changes; Key Sector Analysis; Backward and Forward Linkages; Multiplier Product Matrices; Minimal Information Decomposition of Leontief Inverse; Temporal Leontief Inverse.
Unfortunately full paper has not been submitted.