Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/174466
Authors: 
Leal, Julio
Year of Publication: 
2017
Series/Report no.: 
Working Papers, Banco de México 2017-13
Abstract: 
I show that, under standard assumptions, input-output (or network) economies are equivalent to value-added ones. Using a generalized version of the model in Acemoglu et al. (Econometrica, 2012), I show that the degree of influence of a given sector is equal to its value added share. This occurs because - by using the input-output network - the output of a given sector indirectly contributes to the production of the final consumption of the rest of the sectors, which constitutes the source of its value. Thus, value-added economies deliver the same aggregate response to sectoral shocks than input-output ones. Despite this equivalence, the Leontief multiplier, which applies to sales and gross output, is intact.
Subjects: 
Input-output
Degree of influence
Value added
Network economies
Sectoral shocks
JEL: 
E10
E16
C67
Document Type: 
Working Paper
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