Andersen, Eric Keith
Description
The aims of this thesis have been (a) to examine
the theoretical framework of the input-output technique of
economic analysis, and (b) to set out the results of a project
which was concerned with the treatment of imports in input-output
models. Accordingly, Part I contains a discussion of the
basic Leontief model - the input-output model in its most
simple form. The assumptions made in this method of analysis,
and the essential properties and most important uses of the
model, are...[Show more] examined. The various procedures involved in the
operational use of the basic input-output model, and the methods
of solution available, are dealt with in some detail. The simplifying assumptions made in the basic input-output
model may constitute a serious departure from reality in
certain circumstances, and the possibility of relaxing these
simplifying assumptions is considered in Part II. It would
of course be quite feasible to draw up a single theoretical
model, which incorporated all the modifications and/or extensions
of the simple model and, provided the necessary statistical data
was available, to apply such a model operationally. However,
such a complex model would be unsuitable for examining the
different modifications independently. The procedure adopted
has therefore been to introduce only one or two possible modifications
at a time. The nature and effect of each of the
various modifications and/or extensions of the basic input-output
model are thus more clearly exposed to examination. Furthermore,
it is most likely that only limited modification of the
simple model would be necessary, in order to deal realistically
with a particular problem, and to obtain results which had a
reasonably high degree of accuracy. Parts I and II have drawn on the work of many economists
. An effort has been made throughout to simplify the exposition of the various models as far as possible. In a number
of cases, a clear examination required a more detailed treatment
than had been undertaken in the available literature, as for
example, the discussion of the treatment of imports. Much
attention has been directed to the methods of finding solution
values for each model, and, where it was felt to be appropriate,
e.g. the solution of the linear programming models, rather
different methods of solution have been adopted than those which
had been proposed by the original authors. Some models have
been modified, to a certain extent, to make them more realistic,
and to overcome criticisms which could have been directed at
them in their original form. Part III is devoted to the application of both a
conventional method, and a refined method, of dealing with
imports, to Australian data derived for 1946/47. The results
obtained suggest that input-output studies, for economies such
as Australia, should incorporate a more refined method of
dealing with imports than the methods normally used. There is
some doubt as to the reliability of results obtained in a conventional
analysis. The application of each method of dealing
with imports has been discussed in considerable detail, so as
to provide a clear illustration of the computations necessary
in the operational use of the input-output model.
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