Productive Structure Optimization under Macroeconomic Constraints based on Input-Output Analysis

The term productive restructuring refers to the transformation of an economic system for reaching predefined economic and social goals. The aim of this paper is to develop a methodological framework of productive restructuring, based on input-output analysis, targeting the optimization of the productive structure of an economy. The process of the productive restructuring involves: firstly, the reallocation of production among different economic sectors and, secondly, a process of intermediate input substitution. The proposed optimization model aims at the maximization of the total employment under macroeconomic constraints. A Particle Swarm Optimization algorithm is employed for the solution of the optimization problem. The proposed methodology is applied to the Greek economy. Results appear to show that the productive restructuring should focus on manufacturing sectors, mainly those of high and medium-high technological level. The findings of the research suggest that industrial structure adjustments have great potential for policy development.