José M. Rueda-Cantuche

The Construction of Input–Output Coefficients Matrices in an Axiomatic Context: Some Further Considerations

Kop Jansen & ten Raa (1990) established a purely theoretical solution to the problem of selecting a model for the construction of coefficients on the basis of make and use tables. In an axiomatic context, they singled out the so-called commodity technology model as the best one according to some desirable properties. The aim of this paper is to delineate the restrictions on the relevant data sets that ensure fulfilment of the desirable properties by other models used by statistical offices.

A SYMMETRIC INPUT-OUTPUT TABLE FOR EU27: LATEST PROGRESS

The European Commission is currently establishing an Environmentally Extended Input–Output (EE-IO) Database for the EU27 developed by the Joint Research Centre at the Institute for Prospective Technological Studies (IPTS). This project attempts to generate an analytical dataset comprising all EU countries and yearly time series for the period 1995–2005. Since, for the time being, IO and environmental accounts data are only available with significant gaps part of the dataset will require estimates based on best available proxy data and reasonable assumptions. This paper is focused on the IO database shaped around Eurostat supply and use tables and symmetric IO tables consistent with the NACE classification. The paper describes the procedure by which the latest preliminary results have been obtained for an aggregate EU27 symmetric input–output table for the year 2000.

The Choice of Model in the Construction of Industry Coefficients Matrices

Kop Jansen and ten Raas (1990) characterization of product-by-product input–output tables was adopted by the United Nations (1993). Recent OECD and several EU funded projects, however, used industry-by-industry tables, which raises comparable issues concerning their construction. We show how their two main construction models are instances of the transfer principle, with alternative assumptions on the variation of input–output coefficients across product markets. We augment the theory by formulating desirable properties for industry tables and investigate the so-called fixed product and fixed industry sales structure models, which are used by statistical institutes. The fixed industry sales structure model is shown to be superior from an axiomatic point of view.

Comparing The Gtap-Mrio And Wiod Databases For Carbon Footprint Analysis

We explore two different worldwide multi-regional input–output (MRIO) databases (Global Trade Analysis Project-MRIO and World Input–Output Database) for the calculation of the global carbon footprint (CF) of nations. We start our analysis with a description of the main characteristics of the databases and then make a comparison between their main components. Then, we calculate the CF with both databases and identify (from a global perspective) the most relevant factors underlying their differences using structural decomposition analysis. On average, certain parts of both databases (e.g. intermediate uses and final demand) can be said to be similar for around 75% to 80%, with only a few elements in each part mainly driving the major differences. The divergences in the datasets of four countries explain almost 50% of the differences in the CF (the USA, China, Russia and India). Industry-wise, 50% of the differences can be explained by the divergences in electricity, refining and inland transport industries.

A Generalized Expression for the Commodity and the Industry Technology Models in Input–Output Analysis

Abstract Technical coefficients are usually constructed from commodity or industry technology models. Although these models are considered as competing, there is an encompassing framework that admits a clear comparison.Technical coefficients are usually constructed from commodity or industry technology models. Although these models are considered as competing, there is an encompassing framework that admits a clear comparison.

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.

The Single Market as an Engine for Employment through External Trade

This article quantifies for the first time the European employment effects of extra‐EU exports and the correct number of jobs generated through the intra‐EU trade (single market) associated with the production of such exports. The literature has neglected very often the latter effects mainly due to the lack of an appropriate methodology and data. The main results of the article show that, between 2000 and 2007, an increasing number of European jobs were dependent on extra‐EU exports and on the strengthening of the trade linkages across the internal market. During the period considered, the EU employment supported by extra‐EU exports grew from 22 to 25 million jobs, out of which 9 million jobs (in 2007) were due to spillover and feedback effects associated with the single market. Between 2000 and 2007 the EU also became a more vertically integrated economy, and reduced the labour intensity of the extra‐EU exports.

A NEW SUT CONSOLIDATION METHOD TESTED BY A DECOMPOSITION OF VALUE ADDED AND CO2 EMBODIED IN EU27 EXPORTS

This paper develops a method to consolidate national supply–use tables (SUTs) into a single supra-regional SUT. The method deals with mirror trade statistics problems, such as the different valuation of imports and exports, and it corrects for double-counting re-exports. The method is tested by means of a decomposition of value added and CO2 emissions embodied in EU27 exports to third countries. When the national SUTs for the period 2000–2007 are used, neglecting intra-European Union spillover and feedback effects results in an underestimation of the embodied value added of 12–15%. Not consolidating the national tables properly leads to a further underestimation of 11–16%. With these underestimations removed, EU27 foreign exports still only explain around 11% of EU27 Gross Domestic Product, whereas they explain 17% of the EU27 CO2 emissions. Hence, the income benefits of these exports are, in relative terms, considerably smaller than their CO2 emission cost.

ECONOMETRIC ANALYSIS OF EUROPEAN CARBON DIOXIDE EMISSIONS BASED ON RECTANGULAR SUPPLY-USE TABLES

This paper formalises the so-called Supply-Use Based Econometric (SUBE) approach that allows for the introduction of econometric analysis in the calculation of backward input–output multipliers of the Leontief-type quantity model, using rectangular supply and use tables. The SUBE approach does not require any kind of inverse matrix and incorporates the traditional approach (with square supply-use tables) as a particular case. The empirical analysis shows that the SUBE carbon dioxide multipliers for the EU27 are considerably lower than those obtained by the traditional Leontief inverse. In an application of the SUBE approach, the European economy appears to emit about 10% less carbon dioxide than in a situation in which it would not import any intermediate inputs from outside the EU27.

The Problem of Negatives Generated by the Commodity Technology Model in Input–Output Analysis: A Review of the Solutions

Many economic models (e.g., computable general equilibrium models, econometric input–output models) revolve around a matrix of technical coefficients. However, these matrices can be estimated only once every 5 years as long as they are calculated from input–output tables and these are only published on a 5-year basis. Alternatively, use and make (or supply) tables are being regularly published on a yearly basis. However, they need to be converted into input–output tables as a previous step to form the matrix of technical coefficients. In doing so, this paper aims to shed light on the construction process of input–output tables and to guide economic modelers in making a decision on the way to make such conversion and how to deal with the subsequent problems, particularly with negative technical coefficients.JEL Classification:C67, D57.