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Input–output modelling of the effect of implicit subsidies on general prices

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  • Sharify, Nooraddin

Abstract

Implicit subsidies are implemented for different reasons in many countries. These subsidies generally emerge through selling public resources such as gas, oil, and water at a lower price to one or more sectors. They are not considered in government payments and national accounts. Hence, it is expected that any change in the size of these subsidies influences the price of the relative sectors through the intermediate expenditures. This paper aims at developing the Table Adjusting Price (TAP) and Standard Leontief Price (SLP) models to measure the effect of an exogenous change in the size of implicit subsidy on the price indices of all sectors. The proposed models allowed the researcher to analyse a change in the level of implicit subsidy in different cases. In addition, an empirical example illustrates the result of the implementation of these models.

Suggested Citation

  • Sharify, Nooraddin, 2013. "Input–output modelling of the effect of implicit subsidies on general prices," Economic Modelling, Elsevier, vol. 33(C), pages 913-917.
    • Handle: RePEc:eee:ecmode:v:33:y:2013:i:c:p:913-917
    DOI: 10.1016/j.econmod.2013.06.011
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    Cited by:

    1. Schaffitzel, Filip & Jakob, Michael & Soria, Rafael & Vogt-Schilb, Adrien & Ward, Hauke, 2020. "Can government transfers make energy subsidy reform socially acceptable? A case study on Ecuador," Energy Policy, Elsevier, vol. 137(C).
    2. Wenlang Zhang & Gaofeng Han & Steven Chan, 2014. "How Strong are the Linkages between Real Estate and Other Sectors in China?," Working Papers 112014, Hong Kong Institute for Monetary Research.
    3. Hadrien Camatte & Guillaume Daudin & Violaine Faubert & Antoine Lalliard & Christine Rifflart, 2021. "Global value chains and the transmission of exchange rate shocks to consumer prices," Working Papers hal-03374355, HAL.
    4. Ma, Ning & Li, Huajiao & Zhang, Jinwei & Han, Xiaodan & Feng, Sida & Arif, Asma, 2021. "The short-term price effects and transmission mechanism of CO2 cost pass-through in China: A partial transmission model," Resources Policy, Elsevier, vol. 70(C).
    5. Chan, Steven & Han, Gaofeng & Zhang, Wenlang, 2016. "How strong are the linkages between real estate and other sectors in China?," Research in International Business and Finance, Elsevier, vol. 36(C), pages 52-72.

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    More about this item

    Keywords

    Changes in implicit subsidy; Table adjusting price model; Standard Leontief price model; Input–output price analysis;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • H29 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other

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