Table Of ContentLecture Notes
in Economics and
Mathematical Systems
Managing Editors: M. Beckmann and W. Krelle
292
I. Tchijov L. Tomaszewicz (Eds.)
Input-Output Modeling
Proceedings of the Sixth IIASA
(International Institute for Applied Systems Analysis)
Task Force Meeting on Input-Output Modeling
Held in Warsaw, Poland, December 16-18, 1985
Springer-Verlag Berlin Heidelberg GmbH
Editorial Board
H. Albach M. Beckmann (Managing Editor) P. Dhrymes
G. Fandel G. Feichtinger J. Green W. Hildenbrand W. Krelle (Managing Editor)
H.P. Kunzi K. Ritter R. Sato U. Schittko P. Schonfeld R. Selten
Managing Editors
Prof. Dr. M. Beckmann
Brown University
Providence, Rl 02912, USA
Prof. Dr. W. Krelle
lnstitut fur Gesellschafts- und Wirtschaftswissenschaften
der Universitat Bonn
Adenauerallee 24-42, D-5300 Bonn, FRG
Editors
Prof. Dr. louri Tchijov
International Institute for Applied Systems Analysis (IIASA)
Schlossplatz 1, A-2361 Laxenburg, Austria
Dr. Lucja Tomaszewicz
Institute of Econometrics and Statistics
University of L6dz
Rewolucji 1905 r. 41
90-214 L6dz, Poland
ISBN 978-3-540-18194-1 ISBN 978-3-662-22033-7 (eBook)
DOI 10.1007/978-3-662-22033-7
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© Springer-Verlag Berlin Heidelberg
Originally published by International Institute for Applied Systems Analysis, Laxenburg/Austria in 1987.
2142/3140-54321 0
PREFACE
Input-output modeling activities have been sponsored by IIASA for
many years. These activities provided a link between various research
centers as well as associated research groups engaged in constructing
similar systems, and also individual researchers interested in the
application of input-output type models.
The aim of the sixth IIASA meeting was to demonstrate to a wide
community of researchers, policy makers and their advisers the likely uses
of integrated input-output models in econmic policy both at industrial
and national levels. This message is well illustrated. The papers provide
the users with illuminating simulation studies showing on the one hand the
impact of technological structural changes in the macroaggregates and on
the other hand how the changes in macrovariables influence the pattern of
changes in particular industries.
This volume presents the results of the meeting organized by IIASA
and IES in Warsaw.
WLADISLAW WELFE
Director
Institute of Econometrics
and Statistics
University of Lodz
CONTENTS
Introduction '1 1
Iouri Tchijov and Lucja Tomaszewicz
Principles and Practices of the INFORUM
Interindustry Macro Model 7
Clopper Almon
The Use of Impact Tables in Policy Applications
of Input-Output Models 27
PaaZ. Sand
On Policy Applications of Input-Output Models
in the Federal Republic of Germany 45
Renate FiLip-KBhn and Reiner St~glin
Technological Progress Analysis:
Some Input-Output Approaches 59
Iouri Tchijov and Irene Sytchova
Inforum-Type Model for Czechoslovakia 67
Pavo l Karasz
An Easy Econometric Way of Constructing
79
Input-Output Tables
J.F. Divay and F. Meunier
Financial Restrictions in Optimizing
91
Dynamic Input-Output Model
Sergei V. Kazantzev
Changes of Output Capacity Utilization Caused
99
by Structural Changes of Material Inputs
Czestaw Lipinski
Exchanqe Rates: How They Effect Prices and Quahtities
in the INFORUM-ERI International System of Macroeconomic
107
Input-Output Models
Douglas Nyhus
Intra-CMEA Trade Share Matrices
Reconstruction and Analysis for 1971-1980 113
Adam B. Czyzewski Andrzej Tomaszewicz and Lucja Tomaszewicz
3
Industrial Use of Input-Output Models -
Austrian Experiences 119
Josef Richter
Industrial Modeling with Input-Output.An Application
to the Italian Metal Mechanical Industry 125
F. Gerard Adams
Supply Rigidities in Input-Output Modeling of the
139
Wood and Paper Industry Development
Anatoli Smyshlayaev
VI
The Input-Output Model of the GDR Forest Sector 153
Hans-Utrich Brautzsch
Input-Output Model for Analyzing National
Economics of Varying Energy Intensities 163
T. Revesz
Impact of Constraints in Energy Imports and
Energy Production of Final Domestic Demand 169
Gabrietle Antille and Bernadette Laplanche
Special Input-Output Model for Analyzing the
Effectiveness of the Energy Supply Systems 185
P.
Er~si
INTRODUCTION
Iouri Tchijov
International Institute for Applied Systems Analysis
Laxenburg, Austria
Lucja Tomaszewicz
Institute of Econometrics and Statistics
University of Lodz, Poland
The Sixth IIASA Task Force Meeting on Input-Output Modelling took
place in Warsaw (Poland) from 16 to 18 December 1985. The programme
committee consisted of c. Almon (responsible for participants from the USA
and oversea countries), J. Richter (responsible for the participants from
Western Europe) and L. Tomaszewicz (responsible for participants from the
socialist countries). The Institute of Econometrics and Statistics of the
University of Lodz was the local organizer. This volume contains the pro
ceedings of the meeting.
Among the participants there were two IIASA staff members and nineteen
specialists representing economic or econometric departments of universities
and research institutes from Austria, Czechoslovakia, France, the FRG, the
GDR, Norway, Poland, Switzerland, the United Kingdom, the USA and the USSR.
Most of them represent the INFORUM-farnily model builders. The main atten
tion of the meeting was paid to the following topics: the development of
input-output models of the national economies and their policy applications
including the optimization, as well as the industrial use of the input
output models. Both of them have also been reflected in the research work
of the IIASA "Economic Growth and Structural Change" Project, carried out
in 1985.
The 16 papers presented at the meeting and the 3 papers contributed to
it, have mainly an applied character. The first group of papers examines
practical experience stemming from the construction and direct application
of input-output models of the national economies to economic policy making.
The possibilities of using the input-output approach in optimal decision
making at the national level are also discussed. Naturally, international
comparisons and practical problems of linkage of various national models
(using foreign trade flows) are shown as well.
Papers devoted to the industrial use of input-output models are con
centrated on modelling and analyzing the activities of particular branches
within the framework of the input-output approach. Special attention is
also paid to the problems of the efficiency of energy use.
Each of the above-mentioned areas is briefly described below.
I. INPUT-OUTPUT MODELS AND ECONOMIC POLICY APPLICATIONS
A good introduction to this group of papers is the study of C. Almon,
dealing with LIFT in the INFORUM system. C. Almon -- the leader of the
2
INFORUM-team at the University of Maryland -- concentrates on summarizing
the main principles of INFORUM model building. These models use strict
input-output relations to ensure internal consistency, the modelling,
carried out at a detailed level,is added up to obtain aggregated total
values, and attention is paid to the long-run properties of the model.
C. Almon analyzes some exceptions to these principles and indicates ways to
overcome them. The second section gives an example of the application of
LIFT to calculating the effects of protectionist measures applied to parti
cular industries by establishing quotas on imports of competitive goods.
The impacts of the protection of the exchange rates are also illustrated.
The next paper, written by P. Sand, is devoted to the input-output
model for Norway. The central part of this model is composed of relations
representing the technological and cost structure of the economy, as well
as other definitional and balance equations. The quantity model and the
price model are connected with submodels describing other macroeconomic
categmries. Apart from the direct application of this model to macro
economic planning and elaboration of national budgets, an interesting idea
of constructing and using impact tables is suggested in the paper. These
tables are aimed at showing the effects of changes in exogenous variables.
Examples of the application of impact tables in simulation experiments,
allowing for verification of the model construction itself, as well as for
analysis of different variants of the economic policy, are also given.
Special attention is paid to the use of impact tables in testing the stabi
lity of input-output coefficients and in adjusting the economic plan during
the planning period according to structural changes in basic categories
being modelled.
The"bottlenecks" in the economy are one of the main topics in the
paper presented by R. Filip-Koehn and R. Staeglin. The authors give a
short description of simulation experiments with changes in raw material
supply and their impact on production, employment, prices and wages. A
separate section is devoted to the impact of defence spending on employment.
These considerations are presented with a survey of policy applications
of input-output models in the Federal Republic of Germany.
A new approach to cost structure analysis by the use of input-output
methods proposed and applied to the investigation of post-war technological
progress in the Japanese economy is described in I. Tchijov's and
I. Sytchova's paper. The analysis is based on seven comparable input-output
tables for 1951-1980. The method reveals relations between economic growth,
structural changes and cost reduction, as well as dynamics and inter
dependencies of the three types of technological progress (labor-material
capital savings) for 18 industries and the Japanese economy as a whole.
The adaptation of a "classical", demand-oriented, INFORUM-type
macromodel for the description of economic phenomena in centrally-planned
economies is shown by P. Karasz on the example of Czechoslovakia. The
differences lie rather in the behavioral part of the model, consisting
mainly in introducing specific demand functions of personal and social
consumption, and taking into account central regulations of investments
and inventory changes, as well as an assumption of full employment in
modelling the labour processes.
The computations of macroeconomic structural parameters are shown by
J.F. Divay and F. Meunier on the example of input-output coefficients.
The authors give an idea of computing these coefficients by applying a
relatively simple econometric model based on Leontief's linear relations
between output and production factors. The parameters of this model are
estimated by applying statistical data from particular enterprises with
respect to balancing constraints, heteroscedasticity corrections, a priori
3
constraints on some coefficients, and problems of inventory changes or
products in process.
II. OPTIMIZATION MODELS BASED ON THE INPUT-OUTPUT SCHEME
The authors of the next two papers introduce some optimazation tech
niques using as a basis the input-output systems. S. Kazantzev describes
a sectoral linear optimization input-output model, maximizing the total
consumption in a given structure for each time period, assuming constrained
output for each sector, available stock of fixed assets and labor resources.
The model allows to balance the level of output of sectors producing
investment goods with the amount of financial resources available to these
sectors. Theoretical analysis of the model solution is then carried out,
based on shadow-prices of the right-hand side of the constraints. An
example of different paths of the economic growth according to different
volume of centralized investments and their sectoral structure is also
given.
The paper of Cz. Lipinski is devoted to the investigation of structural
disproportions in the national economy, which occur when the output capacity
of particular branches is utilized at different degrees. Contrary to the
typical econometric methods, based on production functions, the method of
computing the capacity utilization indices is based on a simple linear
optimization model with maximizing the volume of consumption as an objective
function. Leontief's system of input-output relations is used as restric
tion. Simulation experiments with changes in values of most important
input-output coefficients allow to CGmpute the impact of structural changes
in production technologies on the capacity utilization. Some empirical
results obtained for the Polish economy are shown.
III. LINKAGE OF INPUT-OUTPUT MODELS AND RELATED PROBLEMS
Efforts to develop the system of national input-output models have
been completed successfully for the INFORUM-type models of seven developed
countries. D. Nyhus used the INFORUM-ERI International System of Macro
economic Input-Output Models of the USA, Canada, Japan, West Germany,
France, Italy and Belgium to determine the implications of fixed exchange
rates on output, employment and prices as well. His paper exemplifies
the results for Japan and West Germany.
The INFORUM-type input-output models for socialist countries have not
yet been integrated into the system, mainly because of empirical difficul
ties due to constraints in official statistics. The important step towards
the construction of the system of these models is overcoming the data
problems. The paper of A.B. Czyzewski, A. Tomaszewicz and L. Tomaszewicz
reports on the method and results of reconstruction of the trade share
matrices (1971-1980) for European CMEA countries and four CTN commodity
groups. The authors formulate the propositions for exports and imports
shares forecasting.
IV. INDUSTRIAL USE OF INPUT-OUTPUT MODELS
An application example of an INFORUM-type macromodel for Austria is
given by J. Richter. Namely an attempt is described with the application
of this model in microeconomic decision making, especially in the long
run. It requires many additional efforts, both for the model builders
and for its potential users, consisting e.g. in elaborating a kind of
common language, gathering disaggregated data (using some special
disaggregation techniques), applying quantities instead of values in
constant prices, etc. It allows to improve decision-making of particular
firms as well as to increase the reliability of the model estimates.
4
The use of the input-output approach for generating demand for a given
industrial output within the framework of modeling the activity of this
branch by econometric techniques is discussed by F.G. Adams. His paper
provides a prototype for the linkage of national and sectoral models.
Comments on the role of the input-output approach in industrial modeling
are also made. The study presents sample period simulations and multipliers'
analysis for the Italian metal mechanical industry.
A historical analysis and proposals on input-output modeling of the
USSR wood and paper industry are given in A. Smyshlyaev's paper. This task
was undertaken under the IIASA Forestry project. The historical analysis
for the sixties and the seventies constitues a bridge between the quali
tative structure of the resources development and the end-use structure.
The paper by H.-U. Brautzsch presents another example of application
of the input-output approach to industrial modeling. This is an input
output submodel of the GDR's forest sector. It concerns the main flows of
wood within the national reproduction process. 'rhe submodel is proposed
to be linked to the model for planning the forest sector, which reflects
the development of forest resources. Both of them also interact with the
aggregated growth model of the national economy.
V. MODELING OF ENERGY RESTRICTIONS
The next three papers are devoted to the crucial problem of the
economic development constrained by limited energy resources. Under such
circumstances, several significantly important problems are to be solved
by policy makers. The paper presented by T. Revesz discusses a choice
between feasible variants of economic development. Selective variants
(excluding raw material industries with a relatively large demand on
energy) and non-selective variants (excluding none of the industries)
considered for the Hungarian national economy are characterized by some
economic indicators (depreciation, value of fixed assets, employment,
wages, net energy costs). The results of the simulation experiments
constitute a basis for such a choice, which is multicriterial in fact.
G. Antille and B. Laplanche examine another problem -- the impact of
constrained energy production and import on the final domestic demand.
The input-output formalization of this impact allows to take into consi
deration all significant interactions in the economic system. The model
itself is built in physical units (as it concerns only the conversation
processes of the energy carriers), but it can be easily linked with the
classical input-output model in values.
Unlike the two above mentioned papers, dealing with the efficiency
of energy use. P. Erd8si'spaper analyzes the efficiency of energy pro
duction and distribution systems. The investigations are carried out on
the basis of an input-output model, linking the demand on energy with
needs for primary and secondary energy carriers, as well as needs for
other economic resources (such as fixed assets, labor, wages, etc.). The
study illustrates the results of some simulation experiments, based on
the constructed model.
CONCLUSION
The Sixth Meeting on Input-Output Modeling proved to be a useful
forum for input-output modelers to share their experience. We hope this
volume may be of interest to other input-output researchers.
During the discussions, the use of the application of input-output
models for international comparisons was underlined. In this context,
the necessity of further development of models for centrally planned
economies was emphasized. The shortage phenomena (supply constraints)
should be taken into account in an internationally linked system of models.
