Input—Output Coefficients and Multipliers from a Total-Flow Perspective

In this paper a framework for computing input—output coefficients and multipliers is considered which draws upon the so-called total-flow approach. The total-flow indicators express the total effect of a change in gross output rather than in final-demand deliveries. It is shown that these indicators significantly differ from their final-demand counterparts in their absolute values and in their ranking of input—output sectors. It is demonstrated that the final-demand-based coefficients and multipliers fail to express an overall effect of an industrial activity (economic sector) and caution must be used in their empirical applications and interpretations.