Difference between revisions of "Ghosh Model"
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| + | == Definition == | ||
| + | A '''Ghosh Model''' is a category of Supply Side Input–Output Models that represent an alternative type of [[Input–Output Model]] to the "demand side" [[Leontief Model]]. The two categories are based on the same set of base-year data<ref>R.E. Miller and P.D. Blair, Input-Output Analysis: Foundations and Extensions, Second Edition, Cambridge University Press, 2009</ref> | ||
| + | |||
| + | == Structure == | ||
| + | Contrary to the static IO quantity model, the static IO price model (or “Gosh” model) is downstream oriented. It captures the effects of input factors, such as wages, on sectoral production prices. As such, they assume that cost/price changes are passed on completely and directly (“cost push/through”). The price model is not relevant in the context of classical EIA and EEIO analyses. | ||
| + | |||
| + | The Ghosh Model approach is made operational by essentially “rotating” or transposing the vertical (column) view of an IO model to a horizontal (row) one. Instead of dividing each column of Z by the gross output of the sector associated with that column, the suggestion is to divide each row of Z by the gross output of the sector associated with that row. We use B to denote the direct-output coefficients matrix that results. | ||
| + | |||
| + | These bij coefficients represent the distribution of sector i’s outputs across sectors j that purchase interindustry inputs from i. These are frequently called allocation coefficients, as opposed to technical coefficients, aij | ||
| + | |||
| + | == Formula == | ||
| + | that underpin the demand-driven model in earlier chapters, namely Z, f, and v, from which x follows as x = Zi+f or as x = i Z + v | ||
| + | |||
| + | x’ = x’B + v’, where v is value added or primary factors and B is the distribution coefficients matrix, calculated by the elements of the SAM divided by the total of their corresponding row. The Ghosh multipliers matrix is derived as G = (I–B)−1. | ||
| + | |||
| + | In the downstream or Ghosh model, a matrix of direct sales A, is defined as the inter-industrial flows a ij tij =xi from an industry i to an industry j per gross input of i. | ||
| + | |||
| + | An element lij of the total sales matrix, or Ghosh inverse L (I Ā1 , represents the amount of gross input x0 v0 (I-Ā) into industry j that absorbed, or utilised a unit of primary inputs v into industry i. The prime denotes transposition. | ||
| + | |||
| + | |||
| + | == See Also == | ||
| + | * [[Leontief Model]] | ||
| + | |||
| + | == References == | ||
| + | <references/> | ||
| + | |||
| + | [[Category:EEIO]] | ||
| + | |||
| + | {{#set:Has Formula = HAS_FORMULA}} | ||
| + | |||
__SHOWFACTBOX__ | __SHOWFACTBOX__ | ||
Revision as of 16:17, 28 February 2022
Definition
A Ghosh Model is a category of Supply Side Input–Output Models that represent an alternative type of Input–Output Model to the "demand side" Leontief Model. The two categories are based on the same set of base-year data[1]
Structure
Contrary to the static IO quantity model, the static IO price model (or “Gosh” model) is downstream oriented. It captures the effects of input factors, such as wages, on sectoral production prices. As such, they assume that cost/price changes are passed on completely and directly (“cost push/through”). The price model is not relevant in the context of classical EIA and EEIO analyses.
The Ghosh Model approach is made operational by essentially “rotating” or transposing the vertical (column) view of an IO model to a horizontal (row) one. Instead of dividing each column of Z by the gross output of the sector associated with that column, the suggestion is to divide each row of Z by the gross output of the sector associated with that row. We use B to denote the direct-output coefficients matrix that results.
These bij coefficients represent the distribution of sector i’s outputs across sectors j that purchase interindustry inputs from i. These are frequently called allocation coefficients, as opposed to technical coefficients, aij
Formula
that underpin the demand-driven model in earlier chapters, namely Z, f, and v, from which x follows as x = Zi+f or as x = i Z + v
x’ = x’B + v’, where v is value added or primary factors and B is the distribution coefficients matrix, calculated by the elements of the SAM divided by the total of their corresponding row. The Ghosh multipliers matrix is derived as G = (I–B)−1.
In the downstream or Ghosh model, a matrix of direct sales A, is defined as the inter-industrial flows a ij tij =xi from an industry i to an industry j per gross input of i.
An element lij of the total sales matrix, or Ghosh inverse L (I Ā1 , represents the amount of gross input x0 v0 (I-Ā) into industry j that absorbed, or utilised a unit of primary inputs v into industry i. The prime denotes transposition.
See Also
References
- ↑ R.E. Miller and P.D. Blair, Input-Output Analysis: Foundations and Extensions, Second Edition, Cambridge University Press, 2009
