Rethinking Input-Output Analysis pp 57-66 | Cite as
Cost-Push IO Price Models and Their Relation with Quantities
- 205 Downloads
Abstract
It is shown how, in the Type I single-region cost-push IO price model, under full competition, exogenous primary input price changes are fully passed on to all intermediate users that fully pass them on further, resulting in endogenous final output price changes. In the Type II interregional IO price model, additionally, export price changes are fully passed on to producers in importing regions or countries, while consumption price changes are fully passed on in wage rates, and further. Finally, it is shown how the Type II interregional IO price model may be combined with the corresponding quantity model by adding demand and supply price elasticities, which results in lower, more realistic price and quantity multipliers.
Keywords
Cost-push price model Cost shares Price multipliers Price/wage/price inflation processes Consumption/output ratios LINE modelReferences
- Bröcker J (1998) Operational spatial computable general equilibrium modelling. An Reg Sci 32:367–387CrossRefGoogle Scholar
- Chenery HB, Clark PG (1959) Interindustry economics. Wiley, New YorkGoogle Scholar
- Choi J-K, Bakshi BR, Haab T (2010) Effects of a carbon price in the U.S. on economic sectors, resource use, and emissions: an input-output approach. Energy Pol 38:3527–3536CrossRefGoogle Scholar
- Dietzenbacher E, Serrano M (2012) How much would the Kyoto Protocol cost to consumers? In: Paper final WIOD conference, Groningen, 24–26 Apr 2012. http://www.wiod.org/conferences/groningen/Paper_Dietzenbacher_Serrano.pdf. Accessed 26 Aug 2019
- Evans MK (1973) A forecasting model applied to pollution control cost. Pap Proc Eighty-fifth Annu Meet Am Econ Assoc 63:244–252Google Scholar
- Giarratani F (1974) The effect on relative prices of air pollution abatement: a regional input-output simulation. Model Simul 5:165–170Google Scholar
- Kerscher K, Prell C, Feng K, Hubacek K (2013) Economic vulnerability to peak Oil. Global Environ Change 23:1424–1433CrossRefGoogle Scholar
- Kratena K (2017) General equilibrium analysis. In: ten Raa T (ed) Handbook of input-output analysis. Edward Elgar, CheltenhamGoogle Scholar
- Leontief WW (1951) The structure of the American economy: 1919–1939, 2nd edn. Oxford University Press, New YorkGoogle Scholar
- Madsen B (2008) Regional economic development from a local economic perspective—a general accounting and modelling approach. Habilitation thesis, University of CopenhagenGoogle Scholar
- Madsen B, Jensen-Butler C (2004) Theoretical and operational issues in sub-regional economic modelling, illustrated through the development and application of the LINE model. Econ Model 21:471–508CrossRefGoogle Scholar
- Miernyk WH (1976) Some regional impacts of the rising costs of energy. Pap Reg Sc Assoc 37:213–227CrossRefGoogle Scholar
- Oosterhaven J (1981) Export stagnation and import price inflation in an interregional input-output model. In: Buhr W, Friedrich P (eds) Regional development under stagnation. Nomos-Verlag, Baden-BadenGoogle Scholar
- Oosterhaven J, Polenske KR, Hewings GJD (2019) Modern regional input-output and impact analysis. In: Capello R, Nijkamp P (eds) Handbook of regional growth and development theories: revised and extended, 2nd edn. Edward Elgar, CheltenhamGoogle Scholar
- Polenske KR (1979) Energy analyses and the determination of multiregional prices. Pap Reg Sci Assoc 43:83–97CrossRefGoogle Scholar
- Romanoff E, Levine SH (1986) Capacity limitations, inventory, and time-phased production in the sequential interindustry model. Pap Reg Sci Assoc 59:73–91CrossRefGoogle Scholar
- Schuman J (1968) Input-output analyse. Springer, BerlinCrossRefGoogle Scholar
- Shoven JB, Whalley J (1992) Applying general equilibrium. Cambridge University Press, New YorkGoogle Scholar