ANALYSIS OF MULTIPLIERS IN STOCHASTIC INPUT-OUTPUT MODELS

It is widely recognized that the coefficients of input-output matrices are subject to many sources of error. Therefore a stochastic approach to the Leontief model seems appropriate. As it is impossible to analyse all the effects of errors, the problem is often narrowed down to the economically important issue of the evaluation of the muitipliers under stochastic assumptions. Since Leontief inversion is a non-linear operation, the expected value of the multipliers will in general be different from the observed values. Hence, the question arises whether the true multiplier values are over- under-estimated by the observed ones. We will look at this problem from different angles. On one hand, we present an overview of theoretical results from the literature. On the other hand, we examine the relevancy of these results from a more practical point of view.