Skip to main content

Understanding the Shortcomings of Commodity‐based Technology in Input–Output Models: an Economic‐Circuit Approach

Buy Article:

$51.00 plus tax (Refund Policy)

Abstract. 

The Make‐Use Model serves as a basis for most national accounting systems as the System of National Accounts (SNA) and is acknowledged as the most suitable model for interregional analysis. Two hypotheses are traditionally made featuring either industry‐based technologies (IBT) or commodity‐based technologies (CBT). While industry‐based technologies can be easily interpreted in terms of a demand‐driven economic circuit, it will be shown that: (1) commodity‐based technologies cannot be interpreted as a demand‐driven economic circuit because this involves computing the inverse of a matrix (the matrix of industry output proportions), which is either impossible or generates negative terms; (2) the only way to obtain a plausible explanation of CBT is to convert it into a supply‐driven model. This provides a new reason for rejecting CBT: either IBT is adopted but violates Kop Jansen and ten Raa's axioms, or CBT is chosen but must be converted into a poor or unrealistic supply‐driven model.
No References
No Citations
No Supplementary Data
No Data/Media
No Metrics

Document Type: Research Article

Affiliations: Regional Economics Application Laboratory and Faculty of Economics, University of Burgundy, 2 Bd Gabriel, B.P. 26611, F-21066 Dijon Cedex, France. louis.de-mesnard@u-bourgogne.fr

Publication date: 2004-02-01

  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more