Item 24a: Symmetrical input/output tables ESTP course on National Accounts ESA 2010 Luxembourg, 30 May – 03 June 2016 Eurostat

Structure Session 1 Session 2 Overview Supply and Use Tables (SUT) Purposes of Input-Output framework Balancing Imports Exercise Session 2 Other issues Symmetric Input-Output Tables (SIOT) 2

Exercise – flow chart of simple economy 100 350 90 220 30 50 70 100 100 140 60 70 3

Exercise: Convert flow chart into SUT scheme! 4

100 350 90 220 30 50 70 100 100 140 60 70 5

Exercise: solution 6

Structure Session 1 Session 2 Overview Supply and Use Tables (SUT) Purposes of Input-Output framework (history) Balancing (Value Added) Imports Exercise Session 2 Other issues Symmetric Input-Output Tables (SIOT) 7

Some more detailed issues Classification Valuation Supplementary information 8

Classification Product classification >> industry classification Grouping of local KAU Market/non market output 9 9

Valuation supply table at basic prices use table at purchasers’ prices GVA is recorded at basic prices transition required from supply table to use table (extra columns): Trade and transport margins Taxes less subsidies on products (see table 9.7 and table 9.8 of ESA2010) 10 10

Supplementary information gross fixed capital formation by industry stocks of fixed assets (net and gross) by industry labour inputs by industry (hours worked) division in market output, output for own final use and other non-market output 11 11

Structure Session 1 Session 2 Overview Supply and Use Tables (SUT) Purposes of Input-Output framework (history) Balancing (Value Added) Imports Exercise Session 2 Some more detailed issues Symmetric Input-Output Tables (SIOT) 12

Symmetric input-output tables (SIOTs) Tool for analysis: effect and indirect effects / impact of policies / modeling From SUT to SIOT: four transformation models based on assumptions

Overview 14 14

Symmetric input-output tables (SIOTs) Two types of symmetric IO tables: industry-by-industry: i*i describe inter-industrial relations (rather institutionally) product-by-product: p*p describe technological relationships between production processes of products 15 15

SUT => SIOT 16

Role of statistical units If industries are based on local KAU concept, then amount of secondary production will be low -> difference between p*p and i*i will be small If industries are based on concept of institutional units => more secondary output => bigger difference between p*p and i*i P*p = a manipulated i*i table 17 17

IOT as a result of the transformation of the SUT

Structure Session 1 Session 2 Overview Supply and Use Tables (SUT) Purposes of Input-Output framework (history) Balancing (Value Added) Imports Exercise Session 2 Some more detailed issues Symmetric Input-Output Tables (SIOT) Example/exercise 19

Transformation of the use table: p*p product technology (model A) Each product is produced in its own specific way, irrespective of the industry where it is produced industry technology (model B) Each industry has its own specific way of production, irrespective of its product mix (not recommended) 20 20

Transformation of the use table: i*i fixed product sales structures (model C) Each product has its own specific sales structure, irrespective of the industry where it is produced. fixed industry sales structures (model D) Each industry has its own specific sales structure, irrespective of its product mix (not recommended) 21 21

Product technology model pros and cons Eurostat IO Manual (chapter 11) describes causes and remedies for negatives P*p preferred in SNA: each column represents input structure of corresponding product – product technology model has same assumption Ex: construction company producing repair services as 2nd product. Negatives: product technology incorrect (one product produced in two different ways) – chemicals Economic relations / technological relations (one subcontracts, the other produces in house) Positive feedback : Lot of hand work to improve data and increase homogeneity 22 22

Application

Embodied employment in exports The “other service activities” benefitted most from the exports (9.5 million jobs) followed by manufacturing (9.4 million jobs); they make 75% over the total while manufact. increased by 0.35 Mio. Jobs; Services: 2 Mio.

Euro method and projection Requirements Supply and use tables or input-output table at basic prices for base year Real growth rates for valued added of industries Real growth rates for final demand (private consumption, government consumption, gross fixed capital formation, change in stocks, exports) Real growth rate of imports