accounting framework. The mathematics of input-output economics is straightforward, but the data requirements are enormous because theexpenditures and revenues of each branch of economic activity have to be represented. As a result, not all countries collect the required data and dataquality varies, even though a set of standards for the data's collection has been set out by the United Nations through its System of National Accounts(SNA): the replacement for the current 1993 SNA standard is pending. Because the data collection and preparation process for the input-outputaccounts is necessarily labor and computer intensive, input-output tables are often published long after the year data was collected--typically as muchas 5-7 years after.
Usefulness
In addition to studying the structure of national economies, input-output economics has been used to study regional economies within a nation, and asa tool for national and regional economic planning. Indeed, it may well be that a main use of input-output analysis is that for measuring the economicimpacts of events as well as public investments or programs. But it is also used to identify economically related industry clusters and also so-called"key" or "target" industries--industries that are most likely to enhance the internal coherence of a specified economy. By linking industrial output tosatellite accounts articulating energy use, effluent production, space needs, and so on, input-output analysts have extended the approaches applicationto a wide variety of uses.
Key Ideas
Leontief's seminal test remains one of the best expositions of input-output analysis. Nonetheless, two books--a rather fundamental one by WilliamMiernyk and another by the duo Ronald E. Miller and Peter D. Blair--probably have greater international currency. The latter is presently beingrewritten and re-released, this time by Cambridge University Press. See bibliography.Input-output concepts are simple. Consider the production of the ith sector. We may isolate (1) the quantity of that production that goes tofinal demand,
c
i
, (2) to total output,
x
i
, and (3) flows
x
ij
from that industry to other industries. We may write a transactions tableau
Table: Transactions in a Three Sector EconomyEconomic ActivitiesInputs to AgricultureInputs to ManufacturingInputs to TransportFinal DemandTotal Output
Agriculture51526890Manufacturing1020104080Transportation10155030Labor25305060
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