Multiplier Effects in the Input-Output Model with Two Exogenous Sectors

Oregon Convention Center 

The study extends the input-output (IO) model to economies in which the government intervenes exogenously in the industrial output by setting the import exchange rate or by expanding/contracting public spending. The model is then extended to the more realistic situation in which the economy is driven not only by fiscal stimulus but also by agricultural productive shocks. The multiplier effect of both the fiscal stimulus and the agricultural shocks on industrial output are computed for 103 industries of Argentina's System of National Accounts (SNA) and compared with elasticities obtained through other econometric methods. Along the paper, guidelines are given for the computation of the empirical direct requirement matrices (needed in the aforementioned models) from the Make and Use Tables of the SNA.

Input-Output model

fiscal multipliers

agriculture

Make and Use Tables

System of National Accounts

Argentina