The phantom of the matrix: Inverting the case on closure in Cole's model

Cole, Sam

doi:10.1007/s101100050036

Cited by 6 publications

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“…But trying to prove that his opponents are wrong all the way, he continues to argue that there are no such problems in the fully closed, whole world case either. He does that in Table 1 (Cole, 1999). There, he pre-multiplies a "zero net exogenous demand" vector with an extended Leontief-inverse with cells up in the millions.…”

Section: Can Interregional Feedbacks Be Modelled Without a Model?mentioning

confidence: 99%

“…They show this specification to be internally inconsistent and conclude with some comments on "widespread access to spread-sheets" and "little or no understanding of the underlying logic" (p. 426). Cole (1999) responds with another explanation of his approach, now using a 2-sector summary with a single region versus the RoW, again making use of the round-by-round interpretation of the Leontief-inverse and of spread-sheet demonstrations to prove his points. Lengthy discussions of internal consistency, exogenous versus endogenous items in a fully closed model, and the paradox of infinite multipliers in a finite world are part of the argument.…”

Section: Introductionmentioning

confidence: 99%

“…

Cole (1989Cole ( , 1997Cole ( , 1999 advocates the introduction of expenditure lags and the fullest possible closure of single-region input-output models. Jackson et al (1997, 1999) claim that closing also with regard to the Rest-of-the-World leads to inconsistencies and zero exogenous demand, which makes impact studies impossible.

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confidence: 99%

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Lessons from the debate on Cole's model closure

Oosterhaven¹

2000

Papers in Regional Science

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Cole (1989Cole ( , 1997Cole ( , 1999 advocates the introduction of expenditure lags and the fullest possible closure of single-region input-output models. Jackson et al. (1997, 1999) claim that closing also with regard to the Rest-of-the-World leads to inconsistencies and zero exogenous demand, which makes impact studies impossible. Using somewhat different arguments I agree with them: endogenous interregional feedbacks are conceptually impossible outside a full interregional model. Two hardly discussed points, however, remain for further research. First, closing with regard to all other regional demand is precarious too, as it empirically and theoretically amplifies the one-sidedness of the demand-driven input-output model. Realistic impact studies ask for models including supply-side aspects. Second, adding expenditure lags is an improvement, but the way in which this can be done and should be done requires further theoretical development. JEL classification: C67, D57, E17, R15Note of the Editor-in-Chief: While the preparations for this issue were in progress, the regional science community was struck by the information that Moss Madden fell seriously ill shortly after his return from South Africa, where he participated in an RSAI symposium. Only a few days later, everybody was shocked by the announcement of his sudden untimely death at the age of 53. Professor Moss Madden was an internationally renowned scholar and highly appreciated colleague. His academic legacy comprises numerous seminal contributions to input-output analysis, simulation modeling, and forecasting in regional science. Moss was a good friend of many of us active in regional science, and will be missed. We offer our sincere condolences to his family, friends, and colleagues. As a tribute, commemorating his relentless efforts to advance our knowledge of regional input-output analysis, we dedicate this article to him. It reflects on the debate to which Moss contributed so much.

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Section: Can Interregional Feedbacks Be Modelled Without a Model?mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Lessons from the debate on Cole's model closure

Oosterhaven¹

2000

Papers in Regional Science

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“…Some of this related work on IO, by this author, also has led to a virulent debate as to why the world economy -as a closed system -does not explode or collapse in response the smallest disturbance![29] This storm in a teacup is reminiscent of the debate between the Sussex and MIT authors about backcasting with the Limits models. Again, world modeling becomes the place where mathematics, economics, history, physics, religion, and philosophy intersect-a fascinating launch pad for a class on Futures Studies and Social Issues.…”

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confidence: 95%

Global issues and futures: A theory and pedagogy for heuristic modeling

Cole

2008

Futures

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“…Jackson et al (1997) and Jackson and Madden (1999) pointed out some problems in Cole's closure, regarding to inconsistencies in the model. These arguments were refuted in two subsequent articles: Cole (1997Cole ( , 1999. Later on, Oosterhaven (2000) summarised the debate, discussed the main aspects arisen from the academic problem and opened the remaining points for further research.…”

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confidence: 99%

The role of saving and investment in a SAM price model

Llop

2010

Ann Reg Sci

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Social accounting matrices (SAMs) are normally used to analyse the income generation process. They are also useful, however, for analysing the cost transmission and price formation mechanisms. For price contributions, Roland-Holst and Sancho (1995) used the SAM structure to analyse the price and cost linkages through a representation of the interdependence between activities, households and factors. This paper is a further analysis of the cost transmission mechanisms, in which we add the capital account to the endogenous components of the Roland-Holst and Sancho approach. By doing this we reflect the responses of prices to the exogenous shocks in saving and investment. We also present an additive decomposition of the global price effects into categories of interdependence that isolates the impact on price levels of shocks in the capital account. We use a 2001 social accounting matrix to make an empirical application of the Catalan economy. JEL Classification

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The phantom of the matrix: Inverting the case on closure in Cole's model

Cited by 6 publications

References 6 publications

Lessons from the debate on Cole's model closure

Lessons from the debate on Cole's model closure

Global issues and futures: A theory and pedagogy for heuristic modeling

The role of saving and investment in a SAM price model

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