WIOD WORLD INPUT-OUTPUT DATABASE construction This project is funded by the European Commission, Research Directorate General as part of the 7th Framework Programme, Theme 8: Socio-Economic Sciences and Humanities. Grant Agreement no: 225 281 WIOD WORLD INPUT-OUTPUT DATABASE construction Marcel Timmer Groningen Growth and Development Centre University of Groningen (WIOD Conference, Vienna , 26-28 May, 2010)

This presentation Why WIOD? GTAP, OECD, IDE, USITC, ….. Construction process in past year Challenges ahead Aim: to inform and invite comments

Possible applications Production and consumption of Greenhouse gas emissions Nakano et al. (2009, OECD), Davis and Caldena (2010, PNAS) Quarter of produced CO2 emissions is not ‘consumed’ in same place OECD net import is about 15-20% of own production China, Russia and Middle East are large net exporters Trade in value added Series of studies, mostly two regions (US and rest of world) Trade imbalance in value added terms much less than in gross terms Different angle on competitiveness and trade policy effects Link international trade and (wage) inequality within countries Almost all studies so far are lacking time-series perspectives

WIOD characteristics Supply and use tables as the basis Time-series benchmarked on National Accounts data Explicit attention for (trade in) services Constant price tables Satellite accounts (socio-economic and environmental) Based on offical statistics with maximum of transparancy in calculations

WIOD: Data and Coverage SUTs and IOTs in current and constant prices Harmonized national supply and use tables (purchasers’ and basic price) Bilateral trade flows of goods and services Inter-country SUTs Inter-country IO tables Socio-economic accounts : labour and capital types Environmental accounts : energy, air emissions, natural resources The tables in the WIOD-database will cover period from 1995 to 2006: 27 EU countries and 13 other major countries 35 industries and 59 products

List of Countries EU-27 plus13 non-EU: - Canada - China - United States - India - Brazil - Japan - Mexico - South Korea - Turkey - Taiwan - Russia - Indonesia - Australia

Structure of national supply and use table

Structure of national supply and use table

Structure of inter-country SUT for country A

Structure of inter-country input-output table for the world (industry-by-industry type)

Differences NAS versus SUT statistics: reasons National Accounts data is revised over time Revisions of basic data Reclassification of activities Methodological changes Change in classifications But this is not (always) followed by revisions in (public) SUT data, in particular outside Europe

Differences NAS versus SUT statistics: value added in some industries, India

Past year work done SUTs time-series (RUG, IPTS, HTWG) Trade in goods and services (WIIW) Inter-country IO tables (RUG, WIIW) Socio-economic accounts (RUG): building upon EU KLEMS project Environmental accounts (IPTS): building upon EXIOPOL project

WIOT construction process

Methodologies 1. Time-series of SUTs at purchasers’ prices Extrapolation and benchmarking of SUTs to National Accounts statistics: Total Final demand by type Total Export and total Import Value added and gross output by industry Based on SUT-RAS method (Temurshoev and Timmer 2009) 2. From SUTs at purchasers’ prices to basic prices Construction of margins of wholesale, retail, motor, transport and net taxes at product level Estimation of valuation matrices based on structure in margins (e.g. no retail margins on intermediate uses) At later stage offical margin matrices, if available

Methodologies 4. From SUTs to inter-country input-output table 3. From national to inter-country SUTs Breakdown of Use table into domestic and imported (by delivering country) Relying on imports from international trade statistics Not simple proportional method, but distinction between intermediate, consumer and capital goods. This was based on a new classification of HS6-digit products to end-use In later stage use import tables from NSIs if available 4. From SUTs to inter-country input-output table Technology assumptions Rest of World: exports to RoW is calculated as residual and can become negative

Methodologies 5. From current price to constant price tables National deflators Based on industry gross output deflators, and row wise deflation of SUT At later stage add in more information from national accounts (final demand deflators, intermediate input deflators, import/export deflators) International deflators (PPPs): World Bank ICP expenditure PPPs adjusted and allocated to industries (for 2005)

Practical implementation Harmonisation SUTs Industry and product classification FISIM Missing or confidential observations Ad-hoc adjustments for each country Time series of exports and imports at product level Total Export and total Import from NatAcc (goods and services seperately if possible) Distribution over products from columns in SUTs Movement between SUT years based on international trade data trends (at product level) Time-series of changes in inventories Time-series of margins: trade, transportation and net tax

Socio-economic accounts Data at industry-level that matches SUTs: Employment and wages by skill-level (low/medium/high),and for OECD also age and gender distinction Investment by industry and type (8 assets, including ICT) Sources: EU KLEMS database November 2009 release for OECD (www.euklems.org) wide range of labour, household and capital-surveys for other countries in cooperation with local teams (World KLEMS project)

Concluding remarks Main innovations in WIOD Timeseries data Methodological improvements (e.g. SUT-RAS; import tables) Based on official data with transparant flow of adjustments Integrated socio-economic and environmental accounts Database will be made public Including basic data so user can make alternative choices parts of data public in 2011 full data in 2012

Challenges During project period Constant price tables Trade in services Russia and China accounts Revisions triggered by user feedback Long-term Upcoming revisions in System of National Accounts and industrial classifications SEEA and environmental accounts Institutionalize this type of work

Additional material

Columns in Use table

Rows in Use table (part 1)

Rows in Use table (part 2)

WIOD project: Work Packages WP1-3: Construction of harmonized supply and use tables, national input-output tables, price deflators, trade flows and intercountry input-output tables WP4: Construction of environmental satellite accounts (energy use, greenhouse gas emissions, etc.) WP5: Construction of socio-economic satellite accounts (skill levels, investment, accumulation of intangibles) WP6: Methodological research WP7-9: Development of new models and extension/adaptation of models with track record within EC

Who is in WIOD? University of Groningen (The Netherlands) Institute for Prospective Technological Studies (Sevilla, Spain) Wiener Institut für Internationale Wirtschaftsvergleiche (Vienna, Austria) Zentrum für Europäische Wirtschaftsforschung (Mannheim, Germany) Österreichisches Institut für Wirtschaftsforschung (Vienna, Austria) Konstanz University of Applied Sciences (Germany) The Conference Board Europe (Brussels, Belgium) CPB Netherlands Bureau for Economic Policy Analysis (The Hague, The Netherlands) Institute of Communication and Computer Systems (Athens, Greece) Central Recherche SA (Paris, France) * Organization for Economic Co-operation and Development (Paris France)

Available WIOD data Available as of June, 15 (!!!! PRELIMINARY DATA !!!!) Timeseries SUTs, current price (purchasers’ price) Energy use by type and CO2 emissions Other air emissions (EU only) Bilateral trade in goods (not mirrored) and services (BoP codes) Output and employment time-series from Nat Accounts Available end of August Timeseries SUTs, current price (basic price) Timeseries SUTs, constant price Inter-country SUT and IO tables Other air emissions (all countries) Bilateral trade in goods and services (WIOD codes) Updates and corrections of June 15 database

Deliverables

Deliverables, coming years