Dynamic econometric input-output modeling: New perspectives

Abstract

In this chapter we discuss some, in our view, fruitful future directions for econometric input-output (IO) modeling. In particular, we bring to the attention of practitioners of this line of research the important recent developments, both theoretical and empirical, in other fields of economics, in particular, in macroeconomics, agricultural economics, and post-Keynesian economics, which have been completely ignored in this strain of modeling. We highlight issues related to modeling of private consumption (consumers’ heterogeneity, socio-economic characteristics of households), and of production and trade (imperfect competition, technical change), data calibration, and real and financial stock-flow consistency. Given their importance and usefulness for a sound economic analysis, we think that regional research in general would benefit if these issues were incorporated into and/or appropriately adopted to the needs of econometric IO (or other relevant regional research) modeling.