TEMPORAL LEONTIEF INVERSE

Abstract

Interest in structural change over time has created a demand for analytical tools that can assist in exploiting trends and uncover tendencies in individual sectors or parts of sectors within the context of an economywide system of accounts. This paper offers an alternative approach and is designed to be used with annual input-output or social accounting systems. To date, analysts have been faced with the prospect of conducting simple comparative static approaches or the enormity of the task involved in constructing dynamic models with complex lead and lag structures. The temporal Leontief inverse, introduced in this paper, offers a less complex, more tractable method for examining structural change when a time series of input-output tables is available. The method draws upon some earlier work that proposed the notion of a field of influence of change and explored alternative methods of decomposition of change.