Income distributions in input-output models

Albert E. Steenge*, Monica Serrano

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

11 Citations (Scopus)

Abstract

The analysis of income distribution (ID) has traditionally been of prime importance for economists and policy-makers. However, the standard input-output (I-O) model is not particularly well equipped for studying current issues such as the consequences of decreasing access to primary inputs or the effects of specific redistributive policies. This paper addresses this gap in the existing literature. We propose that IDs can excellently be studied by restructuring the I-O relations. A new coefficients matrix is defined, the so-called augmented input coefficients matrix. This matrix is the sum of the intermediate input coefficients matrix and newly constructed matrices of sector-specific input coefficients that represent the existing distribution of income. We show that shifts in the distribution can be modelled by attributing weights to these matrices and vary these according to system-specific rules. Numerical illustrations based on the existing literature are given throughout the paper.

Original languageEnglish
Pages (from-to)391-412
Number of pages22
JournalEconomic Systems Research
Volume24
Issue number4
DOIs
Publication statusPublished - 2012

Keywords

  • Income distribution
  • Factor remuneration
  • Augmented input coefficients matrix
  • System numeraire
  • FRAMEWORK
  • PROGRESS

Cite this