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Revisiting The Original Ghosh Model: Can It Be More Plausible?

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  • Ana-Isabel Guerra

    (Department of Economics, Universidad Pablo de Olavide)

  • Ferran Sancho

    (Department of Economics, Universidad Autónoma de Barcelona)

Abstract

We reconsider in this paper the alleged implausibility of Ghosh’s model and we do so reformulating the model to incorporate an alternative closure rule. Our proposed closure rule is in line with the original allocation rules defined by A. Ghosh. The closure solves, to some extent, the implausibility problem that was pointed out by Oosterhaven for then value–added is correctly computed and responsive to allocation changes resulting from supply shocks. Some numerical examples illustrate the sectoral and aggregate consistency of the allocation equilibrium.

Suggested Citation

  • Ana-Isabel Guerra & Ferran Sancho, 2011. "Revisiting The Original Ghosh Model: Can It Be More Plausible?," Working Papers 11.02, Universidad Pablo de Olavide, Department of Economics.
    • Handle: RePEc:pab:wpaper:11.02
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    References listed on IDEAS

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    1. Louis de Mesnard, 2009. "On the fallacy of forward linkages: A note in the light of recent results," LEG - Document de travail - Economie 2009-05, LEG, Laboratoire d'Economie et de Gestion, CNRS, Université de Bourgogne.
    2. Louis De Mesnard, 2009. "Is The Ghosh Model Interesting?," Journal of Regional Science, Wiley Blackwell, vol. 49(2), pages 361-372, May.
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    More about this item

    Keywords

    Multi-sectoral Input-Output Models; Market Economy; Planned Economy;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

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