This textbook helps students to understand the social, economic,
and environmental importance of the mutual relations between
industries in the same and in different regions and nations and
demonstrates how to model these relations using regional,
interregional, and international input-output (IO) models. It
enables readers to extend these basic IO models with endogenous
household expenditures, to employ supply-use tables (SUTs) that
explicitly distinguish the products used and sold by industry, and
to use social accounting matrices (SAMs) that detail the
generation, redistribution and spending of income. In addition to
the standard demand-driven IO quantity model and its accompanying
cost-push IO price model, the book also discusses the economic
assumptions and usefulness of the supply-driven IO quantity model
and its accompanying revenue-pull IO price model. The final
chapters highlight three main applications of the IO model: (1)
economic impact analysis of negative supply shocks as caused by,
for example, natural disasters, (2) linkages, key sector, and
cluster analysis, (3) structural decomposition analysis, especially
of regional, interregional, and international growth, and
demonstrate the strengths and weaknesses of these IO applications.
Written for graduate students of regional and spatial science as
well as for economists and planners, this book provides a better
understanding of the foundations, the power, the applicability and
the limitations of input-output analysis. The second, completely
revised edition expands on updating IO tables, modelling the
disaster reconstruction phase, and includes an appendix on the
necessary matrix algebra.
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