{"title":"3 The Input-Output (IO) Table and its Main Application","authors":"S. Bwanakare","doi":"10.1515/9783110550443-008","DOIUrl":null,"url":null,"abstract":"Leontief tried to apply neo-classical (Walras) general equilibrium to practical economic life. This suggests that subsequent analyses based on I-O tables or their extensions could have economic interpretations within the Walrasian framework apart from a few particular cases—e.g., those that consider the environment—violating Pareto optimum conditions. The objective of this chapter is to present a consistent methodology of updating, forecasting, and economic modelling on the basis of I-O tables—for which underlying matrices are ill-behaved or data are not reliable. The proposed maximum entropy methodology can dynamically assess I-O multipliers and update and forecast I-O table information by combining the generalized maximum entropy principle and macroeconomic theory. The procedure remains in line with multiplier-accelerator analysis, assuming that induced investment is a function of expected growth. The only required condition to apply the proposed techniques is the availability of statistical information on final demand or value-added accounts which allow for updating under some constraining information (macroeconomic or not) obtained earlier, according to the traditional approach I-O table. In the following sections, classical structure of an I-O table will be reviewed. The next step will describe I-O multipliers and their usage before trying to solve the more complex aspects of their estimation. Next, the proposed methodology for updating and forecasting an ill-behaved IO table will be described and the model presented.","PeriodicalId":133118,"journal":{"name":"Non-Extensive Entropy Econometrics for Low Frequency Series","volume":"52 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2017-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Non-Extensive Entropy Econometrics for Low Frequency Series","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1515/9783110550443-008","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 0
Abstract
Leontief tried to apply neo-classical (Walras) general equilibrium to practical economic life. This suggests that subsequent analyses based on I-O tables or their extensions could have economic interpretations within the Walrasian framework apart from a few particular cases—e.g., those that consider the environment—violating Pareto optimum conditions. The objective of this chapter is to present a consistent methodology of updating, forecasting, and economic modelling on the basis of I-O tables—for which underlying matrices are ill-behaved or data are not reliable. The proposed maximum entropy methodology can dynamically assess I-O multipliers and update and forecast I-O table information by combining the generalized maximum entropy principle and macroeconomic theory. The procedure remains in line with multiplier-accelerator analysis, assuming that induced investment is a function of expected growth. The only required condition to apply the proposed techniques is the availability of statistical information on final demand or value-added accounts which allow for updating under some constraining information (macroeconomic or not) obtained earlier, according to the traditional approach I-O table. In the following sections, classical structure of an I-O table will be reviewed. The next step will describe I-O multipliers and their usage before trying to solve the more complex aspects of their estimation. Next, the proposed methodology for updating and forecasting an ill-behaved IO table will be described and the model presented.