Gerhard Streicher

WHITHER PANAMA? CONSTRUCTING A CONSISTENT AND BALANCED WORLD SUT SYSTEM INCLUDING INTERNATIONAL TRADE AND TRANSPORT MARGINS

This paper extends work done within the World Input–Output Database project (WIOD), which compiled supply and use tables (SUTs) for 40 countries, covering about 85% of the world economy, by adding SUTs for the “rest of the world” (RoW), the approximately 15% of the world economy not covered by the 40 countries included in the WIOD database, ensuring a consistent and balanced world SUT system. The term “consistency” means that at the world level, all flows of goods and services balance, properly accounting for trade and transport services used in international trade (the “cif-fob difference”). This results in SUTs for the RoW which, together with bilateral trade matrices for all commodities (and together with the 40 national SUTs from the WIOD project), describe a consistent SUT system at the world level.

FIDELIO: A fully interregional dynamic econometric long-term input-output model for the EU

Policy simulations during the last decades have been heavily relying on standard static CGE models with a small number of industries. Recently DSGE models (usually termed as New Keynesian) have been developed that incorporate dynamic behavior and institutional constraints at the aggregate macroeconomic level. Only few examples of CGE models with high industry detail and dynamic behavioral rules can be found in the literature, for example the IGEM model by Jorgenson and his collaborators. We present FIDELIO as a model, oriented along the lines of IGEM, and also heavily relying on the ‘Jorgenson philosophy’ of calibrating the model with parameters taken from recent and relevant econometric work. The framework of FIDELIO is the set of supply-use tables at the level of 59 industries/commodities for the EU 27. These tables are made consistent with international trade flows, relying on the WIOD (www.wiod.org) database and thereby generating an inter-regional model set-up. The input-output structures are partly flexible (not Leontief type functions) by modeling factor demand and trade using flexible functional forms (Translog and AIDS). FIDELIO describes private consumption as a dynamic optimization process with durables, non-durables (‘buffer stock’ model) and special emphasis on energy and the energy efficiency of the stock of durables. The behavior of firms is described by a Translog model, where dynamics is introduced by adjustment of the ex post return on capital to the forward looking user cost relationship. This model differentiates K,L,E,Mm,Md inputs, therefore dealing explicitly in a flexible form with substitution between imported intermediates (Mm) and all other factors. That yields a different model of international trade compared to the standard CGE model, where imported commodities are only substituted against domestic commodities at all levels of demand. Environmental satellite accounts for energy and environment from the WIOD (www.wiod.org) database are consistently linked to the input-output structures. Factor supply is modeled by a segmented labor market (skills) with wage bargaining based on the wage curve model. Diverse policy analyses related to sustainable consumption and production in a broad sense.

De- versus Re-industrialisation: Is Structural Change Reversible?

We investigate the causes of de-industrialization and potential for re-industrialization using trade-linked Input-Output data from WIOD. Introducing new measures of induced value added chains, we relate a sectors share in domestic final demand to that in production and separate the direct effect of trade on its income share. This method establishes a new measure of comparative advantage and identifies the declining share of manufacturing value added in domestic final expenditures to be the main cause of de-industrialization. Differences in comparative advantage between countries do matter, especially in the case of employment shares, but have a limited impact via the direct trade effect on value added. The findings point to a peculiar paradox of industrial policy: precisely when it is successful in raising competitiveness and hence productivity growth of manufacturing, it also furthers the global decline of relative prices in manufacturing. In contrast to the national objectives of re-industrialization, effective industrial policies accelerate de-industrialization in the global economy.

Modeling the Regional Economy: A Regional Econometric Input-Output Approach

Abstract In an attempt to model the regional economic system of Styria, an integrated approach was pursued which combines econometric and input-output modelling techniques. Applications of the model in impact analysis and forecasting thus take into account both intersectoral linkages as well as the dynamic behaviour of the variables. The paper first compares different strategies to integrate econometric and input-output modules and then outlines the basic characteristics of the model, including a short description of its extensive regional data base. Examples for model applications and suggestions for further improvements and extensions of the model are also presented.

Chapter 50 – Modeling the Regional Economy: A Regional Econometric Input-Output Approach

Publisher Summary This chapter describes the modeling of the regional economy. In an attempt to model the regional economic system of Styria, an integrated approach was pursued which combines econometric and input-output modeling techniques. Thus, the applications of the model in impact analysis and forecasting take into account both inter-sectoral linkages as well as the dynamic behavior of the variables. The combination of econometric and input–output techniques in this type of model enables to construct input output tables for any year for which data is there in time series. These derived input-output tables can be used to compare the development of sectoral linkages over time and analyze the structural changes that took place in the region. Another field of exercise for the model is the impact analysis of policy shifts or large-scale investment projects in the region. The occurrence whose impacts are to be analyzed is modeled as exogenous shocks. It is found that the input–output module allows for a detailed sectoral disaggregation of these effects, while their spreading over time can be shaped by the econometric module.