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Negatives in symmetric input-output tables: The impossible quest for the holy grail

Author

Listed:
  • Louis de Mesnard

    (LEG - Laboratoire d'Economie et de Gestion - UB - Université de Bourgogne - CNRS - Centre National de la Recherche Scientifique)

Abstract

In the Supply-Use (or Make-Use) input-output model, "product-technology" (PT) or "fixed-industry-sales-structure" (FISS) assumptions are more widely adopted (SNA, Eurostat) for deriving symmetric input-output tables (SIOT) than "industry-technology" or "fixed-product-sales-structure" assumptions, but generate negatives in the SIOT. A SIOT deduced from the Supply-Use model is considered as satisfactory as soon as it contains no more negatives: scholars have focused on the negatives in the SIOT and on how to remove them. However, as a SIOT may include no negatives even if there are some negatives in the inverse Supply matrix, we have completely reversed the reasoning. A counter-example demonstrates that computing the inverse Supply matrix, as imposed by PT or FISS assumptions, is mathematically a nonsense operation even when the SIOT does not include any negative; this result is new. Hence, deriving a SIOT under PT or FISS assumptions must be rejected. Three applications are provided: Austria 2000 and 2005 and USA 2007.

Suggested Citation

  • Louis de Mesnard, 2009. "Negatives in symmetric input-output tables: The impossible quest for the holy grail," Post-Print hal-00418857, HAL.
    • Handle: RePEc:hal:journl:hal-00418857
    DOI: 10.1007/s00168-009-0332-5
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    References listed on IDEAS

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    More about this item

    Keywords

    Input-Output; Supply-Use; Make-Use; Product technology; SIOT; SNA; Eurostat;
    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

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