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On the consistency of commodity-based technology in the Make-Use model : a new interpretation

Author

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  • MESNARD, Louis de

    (LATEC - CNRS UMR 5118 - Université de Bourgogne)

Abstract

Most national accounting systems are based on the Make-Use model. Two hypotheses are traditionally made featuring either industry-based (IBT) or commodity-based (CBT) technologies. IBT corresponds to a consistent demand-driven model: its solution can be explained as a circuit or in probabilistic terms, even in the rectangular case. CBT obliges to compute an inverse matrix which is impossible when rectangular, fails to indicate how a commodity is distributed throughout industries and precludes interpretation of CBT as a circuit or in probabilistic terms. CBT should be interpreted as supply-driven to recover its coherence as a circuit even in the rectangular case.

Suggested Citation

  • MESNARD, Louis de, 2001. "On the consistency of commodity-based technology in the Make-Use model : a new interpretation," LATEC - Document de travail - Economie (1991-2003) 2001-05, LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS UMR 5118, Université de Bourgogne.
    • Handle: RePEc:lat:lateco:2001-05
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    More about this item

    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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