A scenario-based method for projecting multi-regional input–output tables

Abstract

Multi-regional input–output (MRIO) data are a powerful tool to analyze complex interdependencies in the international trade and supply network. Their field of application is however limited by the fact that MRIO datasets are only available for past years whereas the structure of the international trade network has been found to change profoundly over time. We here propose the SPIN method, a simple and flexible algorithm that can project MRIO tables into the future based on transparent scenarios of how gross domestic product and trade relations may evolve in that time. By combining well-established input–output techniques, namely the Leontief quantity model and an RAS-type algorithm, our method provides a straightforward mean to convert quantitative scenarios of the world economy into consistent MRIO tables. We illustrate the functioning of the SPIN method by projecting the evolution of the trade network after the 2008 financial crisis under different alternative scenarios of recovery.