The economic contribution of agriculture for rural economy-an application of input-output analysis

Abstract

The paper presents the results of an input-output analysis identifying the role and the economic contribution of agriculture for the economy of rural Vysocina Region. Also the sectors that could most benefit the economic development of the Vysocina Region were revealed. To perform the analysis a regional input-output table was constructed by using GRIT methodology. The economic contribution of agriculture is not insignificant. An increase of agricultural production has not underlying influence on total regional production, however, it can positively affects regional incomes. The reduction of agricultural activities could lead to significant losses in income and employment in agriculture and consequential sectors and inhibit regional development. The strong relationship between agriculture and food processing industry can increase regional income and employment subsequently. Machinery, basic metals, construction, tourism and food processing industry play the significant role in the economic structure and can contribute to an increase of income, employment and production in Vysocina Region.