Reconstruction of Demand Shocks in Input-Output Networks

Abstract

2[0000−0001−5220−402X] , Johannes Többen 3,4[0000−0001−7059−3612] , Wilhelm Kuckshinrichs 1[0000−0002−5181−1298] , Malte Schröder 5[0000−0001−8756−9918] , and Dirk Witthaut 1,2[0000−0002−3623−5341]Abstract. Input-Output analysis describes the dependence of production, demand and trade between sectors and regions and allows to understand the propagation of economic shocks through economic networks. A central challenge in practical applications is the availability of data. Observations may be limited to the impact of the shocks in few sectors, but a complete picture of the origin and impacts would be highly desirable to guide political countermeasures. In this article we demonstrate that a shock in the final demand in few sectors can be fully reconstructed from limited observations of production changes. We adapt three algorithms from sparse signal recovery and evaluate their performance and their robustness to observation uncertainties.

Reposition of Forward-to-Backward Input-Output Analysis

“…This matrices have been used either for analysis with stable prices and altering quantities by quantity-oriented endogenous or exogenous stimuli on the components of intermediate and final demand, or for analysis with stable quantities and changing cost and prices due to cost-push endogenous or exogenous stimuli on the intermediate and the value added productive factors (Pham et al, 2007;Trinh et al, 2012;Choi et al, 2014;Escaith, 2014;Soklis, 2014;Trinh and Phong, 2014;Economakis et al, 2015;H. A. Bekhet et al, 2016;Imansyah et al, 2017;Kolokontes et al, 2018;Mariolis et al, 2018;Muchdie et al, 2018;Kolokontes et al, 2019;Mariolis et al, 2019;Teves, 2019;Ferreira et al, 2020;Han et al, 2020;Kolokontes et al, 2020;Thai et al, 2020;Markaki and Economakis, 2021;Trinh and Thai, 2021).…”

“…• The case (I) is the static snapshot of interdependences among the sectoral production's functions and consequently depicts the offset point of present phase for the cross-sectoral balance, with standard the quantities and the prices (cost) in the sectoral productive processes (Leontief, 1951;Chen, 1976;Miller, 1989, p. 243;Briassoulis, 1991;Baumol and Wolff, 1994;Eiser and Roberts, 2002;Rickman, 2002;Pham et al, 2007;Meng et al, 2009;Miller and Blair, 2009, p. 243;Belegri-Roboli and Markaki, 2010;A. H. Bekhet, 2012;Trinh et al, 2012;Zhong and Tadayuki, 2013;Kelly, 2015;Mariolis et al, 2018;Kolokontes et al, 2019;Han et al, 2020;Mariolis and Soklis, 2020). Traditionally, the period with the standard prices (case I) is considered as a short-run time period (Jensen et al, 1979).…”

“…12-16;Rogerson and Plane, 1984;Plane and Rogerson, 1986;Miller, 1989;de Mesnard, 1990;Jackson et al, 1990;West, 1995;de Mesnard, 1997;Sonis and Hewings, 1998;de Mesnard, 2000a;Zhang, 2001;Ciobanu et al, 2004;Kuroda and Nomura, 2004;Lian and Haimes, 2006;Meng et al, 2009;Belegri-Roboli and Markaki, 2010;A. H. Bekhet, 2012;Baranov et al, 2014;Kelly, 2015;Han et al, 2020;Mariolis and Soklis, 2020).…”