Difference between revisions of "Ghosh Model"
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Revision as of 17:34, 18 September 2023
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 data[1] but interpret them differently.
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 transposing the vertical (column) view of an IO model to a horizontal (row) one. Instead of dividing each column of Primary Input 
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.
If we denote by 
the direct-output coefficients matrix that results, these 
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.
Formula
Uses the same quantities that underpin the demand-driven model namely Z, f, and v, from which x follows as x = Z i + f or as x = i Z + 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
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
Further Resources
References
- ↑ R.E. Miller and P.D. Blair, Input-Output Analysis: Foundations and Extensions, Second Edition, Cambridge University Press, 2009
