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5 - The Commodity-by-Industry Approach in Input–Output Models

Published online by Cambridge University Press:  06 January 2022

Ronald E. Miller
Affiliation:
University of Pennsylvania
Peter D. Blair
Affiliation:
George Mason University
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Summary

Chapter 5 explores variations to the commodity-by-industry input–output framework introduced in Chapter 4, expanding the basic input–output framework to include distinguishing between commodities and industries, i.e., the supply of specific commodities in the economy and the use of those commodities by collections of businesses defined as industries. The chapter introduces the fundamental commodity-by-industry accounting relationships and how they relate to the basic input–output framework. Alternative assumptions are defined for handling the common accounting issue of secondary production, and economic interpretations of those alternative assumptions are presented. The formulations of commodity-driven and industry-driven models are also presented along with illustrations of variants on combining alternative assumptions for secondary production. Finally, the chapter illustrates the problem encountered with commodity-by-industry models, such as non-square commodity–industry systems, mixed technology options, or the interpretation of negative elements.

Type
Chapter
Information
Input-Output Analysis
Foundations and Extensions
, pp. 176 - 237
Publisher: Cambridge University Press
Print publication year: 2022

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