November 24-25, 2011 APEC-IOT conference, Singapore
Background From Gross to Net Concept 1. From gross output to net output (VA; GDP) I-O economics became less popular despite IOT’s necessity for the accurate GDP estimate. 2. From gross trade to “net” trade From local to global production network /global environmental relations I-O economics and IOT are revived in an international perspective.
From gross to “net” trade Primary factor content of trade (a)International IOT ; tracking the direct and indirect requirements for domestic and foreign intermediate inputs (I- A ) -1 (b) Requirements for primary factor inputs; value added ratios (VA-to-output ratios) ; V Tracking the full requirements for primary factor inputs V (I- A ) -1
Literature Trefler and Zyu (2010) Hecksher-Ohlin-Vanek factor content of trade prediction international IO Koopman, Powers, Wang and Wei (2010) NBER WP The complete exposition of static IO theory frame; VAs+Imports =gross FDs IDE/WTO (2011) marked impact Dietzenbacher and Los (2010) mimeo Incomplete exposition of factor content of trade
Toward Further generalizations in theory and applications Specification of factor inputs by category (capital stock, labor and natural wealth) Specification of tradable factor inputs by country origin; a dynamic setup
Database Asian IO 2005 (IDE et al) ? (Yokohama NU)?? BRICS IO 2005 (IDE et al) ? 26 countries/41 sectors 2004 (USITC) ?? WIOT (Groningen U) ??? EU21-IO 2005 (Hitotsubashi U - Prof. Yoshinaga) Incomplete databases; Need to check and trace each IOT before tracing value added High reliability of data on country-specific value added ratio by sector given country practices
Non-generalization Directions 1 Non-competitive (Isard, 1951) type of input- coefficients results in an accurate analysis for the given period whereas this is likely to hamper the stability of input coefficients which is desirable for a timely forecasting analysis. 2 Value added induced by final demand results in a meaningful analysis based on accurate data. Sustainable compilation of data set. 3 Even macro data on foreign trade might be rather questionable for some countries such as China and Russia. Value-added ratios, GDP and industrial production
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