Rethinking Input-Output Analysis

This book highlights the social, economic and environmental importance of the mutual relations between industries in the same and in different regions and nations, and how to model these relations by means of regional, interregional and international input-output (IO) models. It enables readers familiar with standard matrix algebra to extend these basic IO models with endogenous households' expenditures, to employ supply-use tables (SUTs) that explicitly distinguish the products used and sold by industry, and to use Social Accounting Matrices (SAMs) that detail the generation, redistribution and spending of income. In addition to the standard demand-driven IO quantity model, the book also discusses the economic assumptions and usefulness of the supply-driven IO quantity model, as well as the cost-push and the revenue-pull IO price model. The final chapters highlight three applications of the IO model: (1) linkages and key sector analysis, (2) structural decomposition analysis of regional and interregional growth, and (3) economic impact analysis of negative supply shocks caused by, for example, natural disasters, and demonstrates the strengths and weaknesses of these IO applications. This book appeals to economists and planners as well as scholars of regional and spatial science.