Construction Of A Multiregional Input-Output Model For The Pacific Northwest From Secondary Data

Input-output (I-0) or interindustry analysis has become a useful tool of general equilibrium in economics. It permits estimation of the output effects in all sectors or industries of an economy in response to a change in the output of one sector. This is possible because I-0 shows economic interdependence within the economy. Interregional or multiregional I-0 extends the usefulness of a single state I-0 model to two or more states, and shows the economic structure among states as well as within each state. Where a single state I-0 model has one transaction matrix, a multiregional I-0 (MRIO) has transaction submatrices for each state as well as export and import submatrices, which show interstate trade estimates among industries of the states, all within the MRIO matrix. Figure 1 is a diagram of the Washington-Oregon-Idaho MRIO model developed by the Economic Research Service of USDA. The three submatrices on the diagonal running from upper left to lower right represent the in-state transactions of Washington, Oregon, and Idaho, respectively. Located horizontally from each in-state transaction submatrix are two export submatrices. The submatrix just right of the Washington state submatrix shows Washington exports to Oregon, by sector. Further to the right is a submatrix showing Washington exports to Idaho. Oregon exports are shown horizontally to the left and right of the Oregon state transactions submatrix. Idaho exports are shown to the left of the Idaho state transactions submatrix.