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.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
In (5.1) and (5.10), to keep the mathematics simple, it is assumed that the P exogenous primary input prices are equal for all purchasing industries in all regions. In practical applications, one may, more realistically, equally well assume that these exogenous prices behave differently for each industry.
References
Bröcker J (1998) Operational spatial computable general equilibrium modelling. An Reg Sci 32:367–387
Chenery HB, Clark PG (1959) Interindustry economics. Wiley, New York
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 38:3527–3536
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 63:244–252
Giarratani F (1974) The effect on relative prices of air pollution abatement: a regional input-output simulation. Model Simul 5:165–170
Kerscher K, Prell C, Feng K, Hubacek K (2013) Economic vulnerability to peak Oil. Global Environ Change 23:1424–1433
Kratena K (2017) General equilibrium analysis. In: ten Raa T (ed) Handbook of input-output analysis. Edward Elgar, Cheltenham
Leontief WW (1951) The structure of the American economy: 1919–1939, 2nd edn. Oxford University Press, New York
Madsen B (2008) Regional economic development from a local economic perspective—a general accounting and modelling approach. Habilitation thesis, University of Copenhagen
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 21:471–508
Miernyk WH (1976) Some regional impacts of the rising costs of energy. Pap Reg Sc Assoc 37:213–227
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-Baden
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, Cheltenham
Polenske KR (1979) Energy analyses and the determination of multiregional prices. Pap Reg Sci Assoc 43:83–97
Romanoff E, Levine SH (1986) Capacity limitations, inventory, and time-phased production in the sequential interindustry model. Pap Reg Sci Assoc 59:73–91
Schuman J (1968) Input-output analyse. Springer, Berlin
Shoven JB, Whalley J (1992) Applying general equilibrium. Cambridge University Press, New York
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2019 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this chapter
Cite this chapter
Oosterhaven, J. (2019). Cost-Push IO Price Models and Their Relation with Quantities. In: Rethinking Input-Output Analysis. SpringerBriefs in Regional Science. Springer, Cham. https://doi.org/10.1007/978-3-030-33447-5_5
Download citation
DOI: https://doi.org/10.1007/978-3-030-33447-5_5
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-33446-8
Online ISBN: 978-3-030-33447-5
eBook Packages: Economics and FinanceEconomics and Finance (R0)