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REAL-IO: Analytical Toolbox of Inter-regional 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 2.0Windows 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 input-output analysis.
It provides simple and more complex methods of analysis based on input-output, social accounting and computable general equilibrium models.
REAL-IO is a tool enhancing use of IO-related 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) inter-
country 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
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
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