On Some Basic Issues of Input–Output Economics: Technical Structure, Prices, Imputations, Structural Decomposition, Applied General Equilibrium

This paper reviews some essential characteristics of many inpu–utput models and some of their applications. An overemphasis on technical aspects is criticized. The author advocates working with extended inpu–utput models, which include sectoral income generation and spending and which assume non-competitive sectoral price-sening on output markets. Imputation of volumes of production and primary inputs to components of final demand on the basis of the open static inpu–utput model is rejected. Decomposition of changes of production and primary inputs into sources of structural change is interpreted as an ex post-projection, which should be based on an extended model. The empirical foundation of applied general equilibrium models and their policy applications are considered to be inferior to the econometric estimation and projection application of extended inpu–utput models.