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Methodological Problems of Using the Structural Decomposition Analysis in the Input-Output Model at the Present Stage

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Abstract—

The Input-Output Structural Decomposition Analysis approach enables a fairly comprehensive and detailed analysis of the economic growth sources using the input-output model. The active use of this approach is currently hampered by the lack of a reliable instrumental method for constructing symmetrical input-output tables and deflators that permit the output and import indicators to be recalculated by types of products for different years into constant prices, as well as by ambiguity of interpretations of the content of growth sources. The paper discusses the ways to overcome these methodological problems and gives an example of the experimental use of the structural decomposition analysis approach based on the data of the input-output tables of the Russian Federation for 2011–2015.

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Notes

  1. For such a procedure the so-called “double deflation” method is used, which is believed by a number of economists to be far from indisputable (see, in particular, [7]).

  2. The output matrix is a part of the supply table that characterizes the output by economic activities in the structure of output of goods and services.

  3. The RAS method (or the biproportional method) for the input-output tables was proposed by R. Stone [15].

  4. Strictly speaking, the change in input coefficients is also influenced by the internal structural shifts of the detailed components of the aggregates taken as items of the classifier of products in the input-output tables.

  5. As a rule, structural decomposition provides a more visual representation of the influence of sources on economic growth for longer time intervals (usually the intervals of approximately ten years). However, in our case we are limited by the available data.

  6. The household demand conventionally includes expenses of Non-profit institutions serving households due to their insignificant volume (for example, in 2015 they accounted for 0.7% of household final consumption expenditure) [12].

  7. Note that formula (2) makes it possible to derive other formulas for each of the six terms of the decomposition of the import change vector ΔM. The empirical data show that such changes of the formulas do not significantly affect the result of decomposition [20].

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ACKNOWLEDGMENTS

The article was prepared within the framework of the project Long-term Economic Growth and Structural Changes in Russia, the CIS and Eastern Europe in a Comparative Prospect, which was funded by the Fundamental Research Program of the National Research University, Higher School of Economics.

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Correspondence to E. A. Staritsyna.

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Translated by L. Solovyova

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Baranov, E.F., Piontkovski, D.I. & Staritsyna, E.A. Methodological Problems of Using the Structural Decomposition Analysis in the Input-Output Model at the Present Stage. Stud. Russ. Econ. Dev. 30, 129–135 (2019). https://doi.org/10.1134/S1075700719020035

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