Edited by Thijs ten Raa
Chapter 13: Dynamic input–output analysis
In dynamic input-output analysis investment meets the capital requirements of output growth. The model is linear and the proportionality between type i capital requirements and output j is represented by a capital coefficient. This chapter presents the dynamic input-output model, its solution, and two main issues, namely singularity of the matrix of capital coefficients and causal indeterminacy. Singularity is a mathematical problem that has been solved. Causal indeterminacy is the incompatibility between non-negative output solutions and arbitrary initial conditions, an issue related to the instability of the model. Alternative modifications of the model address the issue. The dynamic input-output model revives in three areas. Human capital formation is modeled to explain endogenous growth. Environmental accounts are added to analyze the depletion of nonrenewable resources. And lagged production and expenditure models are employed in disaster impact analysis.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.