Giorgio Rampa

Using Weighted Least Squares to Deflate Input-Output Tables

This article proposes a balancing procedure for the deflation of input–output (I-O) tables from the viewpoint of users. This is a ‘subjective’ variant of the Weighted Least Squares (WLS) method, already known in the literature. It is argued that it is more flexible than other methods, and it is shown that SWLS subsumes the first-order approximation of RAS as a special case. Flexibility is due to the facts that (a) users can attach differential ‘reliability’ weights to first (unbalanced) estimates, depending on the confidence they have in the different parts of their pre-balancing work, (b) differently from RAS, one is not bound to take any row or column total as exogenously given, and (c) additional constraints can be added to it. The article describes also how SWLS was utilised to estimate a yearly (1959–2000) series of constant-price I-O tables for the Italian economy.

Verdoorn’s Law: Some Notes on Output Measurement and the Role of Demand

The issues that I discuss in this chapter, and that appear in the title, might be viewed at being first as independent of one another. In particular, the first one (output measurement) may seem to be quite untheoretical; and the second one might be expected to contribute little to a school of thought, namely the Kaldorian one, which has already, over many decades, stressed the importance of the demand side of the economy. However, I hope to show that coupling some observations drawn from both parts may help in developing a viewpoint about the Verdoorn effect which, although somewhat unconventional, might be useful in interpreting some actual productivity trends that have been observed in the advanced industrial economies.