Transcript Slides Session 6, Yamano / Hewings

REAL-IO:
Analytical Toolbox of Interregional Input-Output Analysis
Norihiko Yamano, Chun-Hua Wu
and Geoffrey Hewings
Outline
 Goal of REAL-IO (originally
designated as PyIO)
 Functions of REAL-IO
 Single region/country analysis
 Multi region/country analysis
 Future additions
Evolution of IO software in
REAL, University of Illinois
 PyIO 1.0
the first version (Nazara, Guo, Hewings and
Dridi; 2003)
 PyIO 2.0
Windows based interface is created (Wu, 2009)
 REAL-IO 2011
 Analysis modules are transferred to R language
environment.
 Capable of flexible additions of new functions
 Multi country/region time series comparable
indicators
 Improved graphics output
Goal of REAL IO
 It is a package of user-interface
software and function modules for inputoutput analysis.
 It provides simple and more complex
methods of analysis based on inputoutput, social accounting and
computable general equilibrium models.
 REAL-IO is a tool enhancing use of IOrelated systems for policy analysis
Potential Role of REAL IO for WIOD
 Data being generated by WIOD needs
to be complemented by provision of
analytical tools to quickly process and
interpret findings
 REAL-IO has been self-financed –
hence development has been slow
 Exploring alternative funding options
 The preliminary (Feb 2011) intercountry I-O tables are loaded as
example
Python/R-based Hybrid model
 Python is retained as the basis of user
interface for several reasons
 Python has great computational capability
 The codes are trans-platform (Windows/
Mac/ Linux)
 Python is free
 R is chosen as the function operations
 The codes for analytical functions can be
written in intuitive way
 R is free
Functions of REAL IO
 I-O Table Operations
 Basic I-O Analysis
 Advanced I-O analysis
(Single region / Interregional I-O)
 Trade indicators
 Cross-country/Regional comparisons
of indicators
Loading datasheet and quick
browsing of industrial structure
Database
name
Basic I-O Analysis
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Calculate Leontief Inverse
Calculate Ghoshian Inverse
Do an Impact Analysis
Calculate Output Multiplier
Calculate Income Multiplier
Calculate Employment Multiplier
Calculate Input (or Supply) Multiplier
Basic I-O Analysis
Multipliers
 The output multiplier is calculated as the
column sum of the Leontief inverse.
 The computation of income multiplier requires
the use of wage vector (in the primary input
table) to calculate the household input
coefficient.
 The employment multiplier would require the
use of sectoral employment to calculate the
labor input coefficient.
 The input (or supply) multiplier is computed
from the Ghoshian inverse.
More Advanced single country
I-O analysis
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Import contents of exports
Key Sector Analysis
Output Decomposition
Multiplier Product Matrix (MPM)
Analysis
Extracting Method
Pull Analysis
Push Analysis
Field of Influence
Field of Influence
 The underlying idea of the field of
influence is to assess the changes in
the Leontief inverse matrix resulting
from the changes in one or more
direct input coefficients in the inverse
Leontieof matrix.
 Used to identify inverse important
entries and to identify subset of
coefficients or flows for updating
Example (Field of influence)
Focus on Trade and Global
Production Network
 International and interregional trade
growing faster than respective gross
products
 Nations and regions “hollowing out” as a
result of increased fragmentation
(Kierzkowski and Jones) in production
 As WIOD generates increased supply of
intercountry and interrgional databases,
PyIO will provide capability to explore
different facets of trade structure
Vertical specialization
 Demand side: Induced intermediate
imports by unit export (Hummels et
al.,2001)
 Supply side: Imported intermediates
end-up in exports (Meng et al., 2011)
Example
(demand-side VS)
Production chain: Average
propagation length (APL)
 Ideas of Dietzenbacker and Romero building on earlier
work by Robinson and Markandya
 How complex is an economy – how many “rounds of
spending” to generate supply chain to meet final demand?
 Complement this idea with issues of
 Sectoral and spatial propagation – paths of
dependence and interdependence
 Ideas of criticial supply chains and critical linkages
(re-work ideas of field of influence)
 How have changes in firm organization affected
length and location of propagation process (Romero
et al. revealed complex analysis of changes for
Chicago over last 3 decades)
Example (APL)
Interregional analysis
 Inter-regional feedback
decomposition
 Inter-regional production chain
decomposition (APL)
 Regional aggregation (e.g. EU15,
Asia, North America)
Inter-regional domestic
feedback
Inter-country APL
Trade indicators
 Glubel Loyd Intra industry trade
 RCA
 Trade by industry and end-use
(intermediate, capital and household
consumption)
Bilateral trade by industry and
end-use (BTDIxE)
Intermediate for assembly
Other intermediate
Capital
Household consumption
PC & Passenger Cars
Unspecified
Future Additions
 Address demographic challenges
 Consumption, aging etc.
 Links between trade in goods and services and
migration
 Handle integrated models
 Econometric-IO
 CGE – multiregional and multinational
 Economy-environment interactions