Download World trade interdependencies: a New ... perspective

World trade
perspective
interdependencies:
a
New
Zealand
David Gillmore and Phil Briggs
A key determinant of New Zealand’s growth is its trade with the rest of the world. We have developed a world inputoutput table to investigate the way in which New Zealand and Australia depend on the rest of the world, and to look at
the role of demand in China, Japan, the US, and the euro area. We show how higher demand in one economy affects
production in another economy both directly, through its higher demand for final products, and indirectly, via its higher
demand for intermediate products and its impact on production and demand in other economies. We highlight the
impact of US demand on other economies and demonstrate the importance of Chinese and Australian demand on New
Zealand.
1
Introduction
on emerging Asia both directly and via its dependence on
International trade matters for long-run growth. This is
Australia. And, given developing-Asia’s dependence on the
especially true for small open economies such as Australia
United States and euro area, both New Zealand and Australia
and New Zealand.
have indirect linkages to these regions via emerging Asia.
The openness of one country (the amount of international
Figures on the arrows are the share of an economy’s exports
trade a country engages in as a proportion of its GDP) is
to trading partner countries/regions, while those in square
a measure of a country’s inter-relatedness with the rest of
brackets are an economy’s total exports as a percentage of
the world. Given this ratio, a country’s export shares (the
its GDP.
percentage of its exports going to particular countries) can
indicate the dependence on, and vulnerability to, specific
countries. These measures therefore indicate the magnitude
of the benefit each country may gain from the other’s growth
as well as revealing the extent of vulnerability to negative
shocks from the other.
Why use input-output analysis?
While the export shares shown in figure 1 indicate how
concentrated each country’s exports are on particular
trading partners, they give an incomplete picture of
indirect trade linkages and vulnerabilities. A shock to one
For example, figure 1 illustrates how New Zealand is
particular country affects output in other countries, not
dependent on Australia and emerging Asia, based on
only through direct bilateral trade, but also indirectly via
merchandise export shares. Australia is highly dependent
output fluctuations in other countries (Ohyama 2004).
on emerging Asia, which in turn is very dependent on both
To gain a better understanding, what is also needed is (i)
the US and euro area. Thus, New Zealand is dependent
an understanding of intra-country output, (ii) how this
Figure 1
Merchandise export shares illustrate inter-linkages1
1
!
In Figure 1, emerging Asia refers to China & Hong Kong, three NIE countries (Korea, Taiwan and Singapore) and
ASEAN-5 (Philippines, Vietnam, Thailand, Malaysia and Indonesia). Trade figures for emerging Asia are based on
extra-region trade only (i.e., intra-regional trade is not included in total trade). Figures are based on 2006 data.
Reserve Bank of New Zealand: Bulletin, Vol. 73, No. 2, June 2010
35
relates to trade, and (iii) third-country effects. One way of
macro-level table. However, there is an important way that
analysing these inter-linkages between countries is to use an
it differs from the Asian International Input-Output tables.
international input-output table.
While the Asian International Input-Output tables include
Input-output analysis was developed by Wassily Leontief in
the 1930s to study the inter-relationships between different
sectors of an economy. The analysis centres on a matrix
exogenous categories; four countries and an item for the rest
of the world; our model contains no exogenous countries
and the rest of the world item has been made endogenous.
where suppliers of goods are represented by rows and users
The input-output framework can show the effects of a shock
of goods by columns. One application of this method is to
to final demand in one country on production, trade, and
show the impact of a change to final demand on all supply
income in other countries. It can distinguish between the
chains within the economy. It is also used by government
direct effects of such a shock on output in other countries
statistical agencies in constructing national accounts.
and the indirect effects that result from the initial shock.
2
An international input-output table is a representation of total
world output, showing the interaction between countries
of interest. It is based on a matrix of trade flows between
countries as well as internal demand within countries, both
of which are divided into final and intermediate demand.
However, it is a static approach, in that it does not take into
account the changes in employment, prices and spending
patterns that would occur within a general equilibrium
model. Box 1, overleaf, covers the input-output table in
more detail.
Usually, output is broken down by industries in many
countries, thus revealing the inter-industry linkages within
and between countries.3 A well-known example of an
2
Constructing the world inputoutput table
international input-output table is the Asian International
Input-Output table developed by the Institute of Developing
Constructing our world input-output table involves four
Economies at the Japan External Trade Organization (IDE-
steps:
JETRO) in Japan.
1. We derive a matrix of goods and services trade flows,
using data from the IMF, OECD and UN.
A major drawback of international input-output tables
is that they are both time-consuming and expensive to
2. We use country-level input-output tables (from the
construct. So, by the time they are published, the data that
OECD and countries’ statistical agencies) to derive a
they contain are some years old. For example, the latest IDE-
set of parameters regarding tax rates, the ratio of value
JETRO table is for the year 2000.
added to GDP, the ratio of intermediate goods to value
To overcome this problem, economists have combined these
added, and the ratio of imported intermediate goods to
tables with more recent data to estimate updated input-
total imports:
output tables. However, as the estimation procedure cannot
3. We use these parameters – in conjunction with IMF
accurately update the industry-level relationships, these
data on GDP and trade – to produce a 2006 aggregated
updated tables are based on macro-level data (aggregate
input-output table for each country, expressed in US
output and trade data) rather than industry-level data).4
dollars.5
The world input-output table used in this paper is also a
4. We combine these aggregated input-output tables with
our matrix of goods and services trade flows to form our
2
4
3
36
For more detailed descriptions of input-output
analysis, see Wixted et al. (2006, Section 2) and
United Nations (1999).
See Claus & Li (2003) for a New Zealand example.
Recent papers using estimated macro-level AIIO
tables include Sasaki & Ueyama (2009), Pula &
Peltonen (2009), Mori & Sasaki (2007) and Takagawa
& Okada (2004).
world input-output table.
5
The aggregated input-output table includes totals
for: intermediate supply, final demand of locally
produced products, imports of intermediate
products, imports of final-demand products, tax
on intermediate products, tax on final-demand
products, and value added.
Reserve Bank of New Zealand: Bulletin, Vol. 73, No. 2, June 2010
Box 1
In this paper, when we talk about a shock to domestic final
Input-output methodology
demand in one country, we change the items circled in
Table 1 shows a simplified three-country representation
of the world input-output table used in this paper. It
represents the production and demand of countries A, B,
red – that is, the demand of residents of country A, which
is satisfied by final goods produced both domestically (faa)
and imported from other countries (fba and fca).
and C, divided between intermediate demand and final
The lower three rows of the model include tax on
demand. These two categories relate to the destination
intermediate demand and final demand, value added and
country, i.e. they cover the intermediate demand products
total inputs. The table is symmetric. So total inputs (xa,
and final demand products that are required by the
the sum of the first column in the table above) equals
destination country.
the respective total output (the total of final demand and
In both internal demand and final demand matrices, the
intermediate demand at the right of the table).
items on the diagonals represent production that is sold
In the input-output framework, total demand for output
domestically. Off-diagonal items of the rows represent
can be expressed as:
exports, while those of the columns represent imports.
AX + Y = X
The table decomposes output into intermediate demand
where A is a matrix of input coefficients aij= zij/xj and X is
and final demand. Total output of country A is represented
the vector of total outputs for each country (the xa and xb
by xa. This is the sum of those items shaded in grey: zaa is
and xc in our simplified input-output table above), and Y
the output of country A that is used domestically as input
is the vector of total final demand for each country (the
into other production; and zab and zac represent the outputs
ya, yb, and yc above). AX equals the matrix of intermediate
of country A that are exported to countries B and C where
demand. Equation (1) can be rearranged as:
they are used as inputs in production. Similarly, faa is the
output of country A that is consumed domestically as final
product, while fab is final product exported to country B.
Finally, ya is the sum of the final-demand elements in that
(1)
X = [I – A]-1Y
(2)
where [I – A]-1 is known as the Leontief matrix.
With a shock to domestic final demand in one country,
row (faa and fab and fac).
the values in vector Y increase. We use equation (2) to
The columns within the intermediate demand matrix
obtain a new value of total output (X). This step in effect
represent inputs into production. For example, the column
involves solving a series of simultaneous equations that
circled in blue includes inputs for country A’s production
satisfy the new final demand values (Y) and the input
– zaa are inputs produced in country A, and zba and zca are
coefficients of matrix (A). We are then able to calculate a
imports of intermediate goods from countries B and C.
new intermediate demand matrix, in which each element
is zij= aij xj. This gives us an amended input-output table
incorporating the impact of the shock to domestic final
Table 1
demand.
A typical world input-output table
!
Reserve Bank of New Zealand: Bulletin, Vol. 73, No. 2, June 2010
37
Our world input-output table includes New Zealand and
little or no added value. Thus, Singapore’s exports data (as
17 of its trading partners, plus a category for the rest of
shown by the Direction of Trade Statistics figures) do not
the world. Countries included are Canada, the US, Mexico,
accurately reflect its own economic activity, and the data for
the UK, India, Japan, China, Korea, Taiwan, Singapore,
other countries’ imports from Singapore do not reflect the
Philippines,
true country of origin. We therefore re-allocated Singapore’s
Vietnam,
Thailand,
Malaysia,
Indonesia,
Australia and New Zealand, while the euro area is included
as one economy. Hong Kong is included within China. Most
of these economies are in the Reserve Bank’s GDP-16 basket
of countries. We include Mexico in order to have a complete
picture of the North American Free Trade Agreement
re-exports to its trading partner countries.
A similar issue exists for Hong Kong’s trade data, where 95
percent of its imports from mainland China are re-exported.
We overcame this issue by amalgamating Hong Kong and
mainland China as one economy, ‘China’.
countries and India because of its growing importance in
the world economy. We used data for 2006 as that was the
latest available year of services trade figures.
Services trade flows data
There is a severe lack of data on services trade flows between
countries. To construct a matrix of services trade flows, we
Merchandise trade flows data
use data on bilateral flows where they exist, and estimate
Using export data from the IMF Direction of Trade Statistics,
we constructed a matrix of merchandise trade flows,
which has exports represented by values in the rows, while
imports are represented by the columns.6 However, there
are two important data issues that must be addressed in
constructing this matrix. The first issue relates to the lack of
all other items. The existing services trade data falls into
two categories. First, total exports and imports of services
by country are published in the IMF Balance of Payments
Statistics. Second, the UN and OECD publish bilateral services
export and import flows, but for only a limited number of
countries.
data for Taiwan, while the second concerns re-exports from
There are many inconsistencies between these UN and
Hong Kong and Singapore.
OECD figures and between export and equivalent import
Because of the political status of Taiwan, the IMF includes
no section for this country in its Direction of Trade Statistics.
However, we were able to extract the Taiwan figures from
the Direction of Trade Statistics CD-ROM. Taiwan is included
figures.8 We therefore averaged the export and equivalent
import figures (where they exist) for each of the OECD and
UN data sets; we then averaged these average OECD and
average UN figures.
in the aggregate figures for the “Advanced Countries”
category, and we simply calculated values for Taiwan
exports as residuals (the difference between the aggregate
“Advanced Countries” figures and the sum of the other
However, given that the OECD and UN data do not cover all
countries, it was necessary to estimate the missing data. We
did this by estimating a second matrix for services flows, and
then replacing relevant figures with the OECD/UN averages
countries that make up that category).7
described above.9
This ensures that we capture some
Because Singapore acts as a trading hub for the East Asian
8
region, a high proportion (47 percent) of its merchandise
trade consists of imports of commodities or manufactured
products that are re-exported to other destinations with
6
7
38
Oct 2009 CD-ROM – from the “Cross Country Matrix
View” section. All figures are on an f.o.b. basis.
As a crosscheck of this approach, we found that our
export figures matched exactly Taiwan official export
figures. Table 122 of the Statistical Yearbook of the
Republic of China 2007 (Edition 2008) includes
exports in USD to 10 of the 17 countries in our
sample.
9
For example, the OECD figures for 2006: UK imports
from the US is USD 28,535 million compared with
US to UK exports of USD 52,604 million.
Technically, we derived the second matrix by
applying an algorithm to scale our merchandise
trade matrix so that each country’s total services
exports and service imports equal the figures from
the IMF Balance of Payments Statistics. By basing
this estimation on our merchandise trade matrix,
we assume that services trade flows display similar
patterns to merchandise trade. This assumption is
consistent with findings that geographical distance
is as important (or possibly more important) for
services trade as for goods trade (Kimura & Lee
2004).
Reserve Bank of New Zealand: Bulletin, Vol. 73, No. 2, June 2010
important bilateral services flows (such as the exceptionally
both directly, through its higher demand for final products,
high level of financial services trade in and out of the United
and indirectly, via its higher demand for intermediate
Kingdom) that would not necessarily be reflected in our
products and its impact on production and demand in other
second matrix. The final step was to adjust our estimates to
economies.
ensure consistency with the IMF country totals for services
exports and imports.
The effects of an increase in domestic final
demand on output
Completing the input-output table
Figure 2 shows the impact of an increase in domestic final
To complete our input-output table we use data from
demand in each economy on the production (or total output)
individual economies’ input-output tables. In particular, we
in its own economy and in other economies. Each bar of
use (i) percentage of total imports that apply to intermediate
the chart represents the impact of a one-unit shock (of, say,
demand, (ii) domestic intermediate demand (the diagonal
one billion dollars) in that particular economy. The impact is
values of the Intermediate Demand (ID) matrix), (iii) taxes
measured in the same units.
that apply to intermediate and final demand, (iv) value
Figure 2 can be calculated in either of two ways. Firstly, it can
added, and (v) total output.
be done by recalculating the input-output table – adjusting
From our goods and services trade matrix, we divide each
the domestic final demand for the economy concerned,
flow into intermediate products and final products based on
recalculating the table and calculating the change to the
the percentage of total imports that apply to intermediate
total output column. Alternatively, it can be done using a
demand for each country. We then calculate each economy’s
procedure outlined by Mori and Sasaki (2007). This involves
domestic final demand and taxes. The complete table is
constructing a ‘production inducement coefficient matrix’
shown in appendix 2.
which demonstrates the impacts of a one-unit increase in
Two other points are worth noting:
• Because the country-level input-output tables for eight
of the countries show zero tax figures, we also set the
tax figures in our table to zero.10
domestic final demand in each economy in turn. Such a
matrix is shown in table A3.1 in appendix 3.
From figure 2, we see that for most economies the largest
impact of an increase in their final demand is on local
production. This is particularly so for large and advanced
• In order to include the rest of the world as an endogenous
economies. On the other hand, most of the NIE and ASEAN-5
category, we assume the ratio of intermediate demand
economies have a relatively high foreign impact – which is
to total output is similar to the average of emerging/
developing countries.
Figure 2
Total production inducement from a one-unit
increase in domestic final demand
3
Results of the input-output
analysis
We use the world input-output table to investigate the way
in which New Zealand and Australia depend on the rest of
Units
3.0
Home economy
Foreign economies
2.5
2.0
1.5
1.0
the world, and to look at the role of demand in China, Japan,
0.5
the US, and the euro area. We show how higher demand
0.0
in one economy affects production in another economy
10
These countries are the US, Japan, China,
Philippines, Vietnam, Thailand, Malaysia and
Indonesia.
Reserve Bank of New Zealand: Bulletin, Vol. 73, No. 2, June 2010
39
consistent with the interdependent chains of production
We can break down the impacts on foreign countries.
across economies in the region.11
Taking China as an example, its one percent domestic final-
But one country stands out – China. The impact of China’s
domestic final demand on domestic production as a ratio
of its impact on foreign production is significantly higher
than that of other countries. China’s high domestic impact
reflects both the size and dynamism of the domestic
economy – an indication that China is not completely reliant
on final demand in foreign markets. The size of China’s
domestic economy appears more important than its exportled growth suggests.
demand shock, which is equal to USD25.8 billion, results
in its own domestic output increasing by USD56.9 billion
and total foreign output by USD13.3 billion. A breakdown
of this foreign impact (the red portion of the “China” bar in
figure 3) is shown in figure 4. Note the high impact, in dollar
terms, on Japan, the euro area, and the US, as well as the
rest of the world.
Figure 4
Impact on foreign output from a one percent
However, we need to be careful when interpreting the data
shock to domestic final demand in China
presented in figure 2 and table A3.1. We can compare the
USD billions
impacts from a shock in one country on its own and other
3.00
economies (comparing the values within the columns of the
2.50
production coefficient inducement matrix), but comparing
2.00
the effects of shocks in different countries (comparing values
1.50
1.00
across rows in the production coefficient inducement matrix)
can give a misleading picture. This is because the size effects
0.50
0.00
of the economies from which the shocks originate are not
taken into account.
Obviously, the large demand of the US and the euro area
will have scale effects on world trade. Figure 3 shows the
production (domestic and foreign) induced by an increase
of one percent of domestic final demand in each economy.
Here, we see the importance of the US and the euro area
The impact on total output in each economy can be further
broken down into direct and indirect effects. Figure 5 shows
the initial direct effects on production, and the subsequent,
indirect, effects on domestic intermediate demand and
foreign intermediate demand for both Australia and New
because of the size of their economies.
Zealand.
Figure 3
For New Zealand, the initial direct impact on output
Impact on output from a one percent shock to
(USD3.6m) is the amount of exports of final products
domestic final demand
from New Zealand in order to satisfy the rise in domestic
USD billions
300
250
200
final demand in China. This rise in domestic final demand
Home economy
in China also generates additional economic activity both
Foreign economies
in China and in its trading partners. To supply inputs to
150
this additional activity, New Zealand exports additional
100
intermediate products to both China (USD11.2m) and its
50
trading partners (USD4.7m). Finally, the increase in activity in
0
New Zealand as a result of the rise of both final demand and
foreign intermediate demand generates additional domestic
11
40
NIE (newly industrialising economies) are Korea,
Taiwan and Singapore. ASEAN-5 includes
Philippines, Vietnam, Thailand, Malaysia and
Indonesia.
demand for intermediate products (USD17.0m).
Reserve Bank of New Zealand: Bulletin, Vol. 73, No. 2, June 2010
Figure 5
Direct and indirect impacts on Australia and New Zealand
Australia
New Zealand
NZ
AU
USD millions
400
USD millions
40
350
35
300
30
250
25
200
20
150
15
100
10
50
5
0
0
China direct
Other indirect
China indirect
AU domestic
China direct
Other indirect
China indirect
NZ domestic
What is noteworthy about figure 5 is the difference in size
impact on GDP.12 Output figures include the value of inputs
between the direct impact on final demand and the total
as well as value added and so are higher than GDP figures,
output generated. In the case of the Chinese shock on New
which are a measure of the value added alone and therefore
Zealand, the effect on total output is ten times the size of
reflect better the level of economic activity in an economy.
the initial direct effect. Additionally, the total amount of
exports generated (USD19.5m) is five times the size of those
generated by the initial increase in final demand.
Figure 6, overleaf, shows the impact on GDP of changes to
domestic final demand in the US, the euro area, Japan and
China.13 The first chart shows the prominent influence of US
It is possible that the total indirect effects are being
final demand on GDP in other economies, largely reflecting
underestimated, because increases in final demand in each
the size of the US economy. While the euro area is also a large
country from a higher level of demand for intermediate
economy, a one-percent shock has a lower impact on Asian
products are not being accounted for in the input-output
economies than the US. However, it has a larger impact than
model. When we shock the model, final demand remains
the US on the “rest of the world”, which includes eastern
the same, except in the country being shocked. However,
Europe and Russia, and is a sizable proportion of the world
final demand could be expected to rise in each country,
economy.
given the additional income that would be generated by
higher exports.
We now focus on the impact of a separate shock in each
economy on Australia and New Zealand. Figure 7, overleaf,
It could be argued, though, that the indirect effects, even as
highlights the strength of the influence of the US and
shown here, are higher than they would be in reality. This is
Australian economies on New Zealand.14 It also shows the
because the input-output approach assumes that there are
dominant influence of Japan and China on Australia. We
no constraints to supply in meeting the demand induced by
have also included the impacts on Japan and China, to
the initial shock. Overall, the results from the input-output
demonstrate US and euro area impact on these economies.
approach should be seen as being indicative rather than
definitive.
Elasticities: the effects of an increase in
12
domestic final demand on GDP
In the previous section, we have shown the impacts of shocks
to domestic final demand on the output in other economies.
13
14
Input-output analysis can also give us an indication of the
Reserve Bank of New Zealand: Bulletin, Vol. 73, No. 2, June 2010
In appendix 3, table A3.2 is the matrix of elasticities,
where each cell is the percentage change to GDP in
one economy as the result of a one-percent change to
domestic final demand in another economy.
The charts in figure 6 are constructed from the us,
ea, jp, and cn columns in table A3.2.
The charts in figure 7 make use of the data in the nz,
au, jp, and cn rows of table A3.2.
41
Figure 6
Impact on GDP in other economies from a one percent shock to domestic final demand in the US,
Euro area, Japan and China
United States
euro area
%
%
0.25
0.25
0.20
0.20
0.15
0.15
0.10
0.10
0.05
0.05
0.00
0.00
Japan
China
%
%
0.25
0.25
0.20
0.20
0.15
0.15
0.10
0.10
0.05
0.05
0.00
0.00
Figure 7
The impact of one percent shock to domestic final demand in other economies on GDP in Australia,
New Zealand, Japan and China
Australia
New Zealand
%
%
0.10
0.10
0.08
0.08
0.06
0.06
0.04
0.04
0.02
0.02
0.00
0.00
Japan
China
%
%
0.10
0.10
0.08
0.08
0.06
0.06
0.04
0.04
0.02
0.02
0.00
0.00
42
Reserve Bank of New Zealand: Bulletin, Vol. 73, No. 2, June 2010
While figure 7 gives us the elasticities of a change to domestic
4
final demand in other economies on GDP in New Zealand
Conclusion
In this article, we have described the development and use
and Australia, they do not take account of the actual growth
of a world input-output table to better understand the inter-
seen in individual economies in recent times. Figure 8 shows
relationship of New Zealand and its main trading partners,
real growth rates by region from 2006 to 2007.
and the importance of demand from China, Japan, the US,
Figure 8
and the euro area.
Real GDP growth rates in each economy
We have shown how higher demand in one economy affects
(2006-07)
production in another economy both directly, through its
14%
higher demand for final products, and indirectly, via its
12%
additional demand for intermediate products and its impact
10%
8%
on production and demand in other economies. And we
6%
have found that the total trade-related impact may be many
4%
times greater than the initial direct effect would suggest.
2%
0%
Our analysis has confirmed the importance of both the
US and euro area domestic final demand as well as those
of Japan and China within the world economy. It has also
In figure 9 we adjust the shocks to domestic final demand
demonstrated the huge influence of the Chinese and
to represent these growth rates. Note, though, that our
Australian economies on New Zealand economy.
procedure assumes that the shock to each country occurs
exogenously – independently from shocks in the other
economies.
References
Claus I and K Li (2003), “New Zealand’s production structure:
Figure 9 is therefore only illustrative of the influence of the
growth in each economy on Australia and New Zealand. We
an international comparison”, New Zealand Treasury
Working Paper, 03/16.
see the dominant impact of the growth in China’s domestic
final demand on Australia. For New Zealand, China and
Australia are the dominant economies.
Kimura, F and H-H Lee (2004), “The gravity equation in
international trade in services”, European Trade Study Group
Conference, University of Nottingham.
Figure 9
Impact of 2006-07 growth in other economies on GDP in Australia and NZ
Australia
New Zealand
%
%
0.30
0.30
0.25
0.25
0.20
0.20
0.15
0.15
0.10
0.10
0.05
0.05
0.00
0.00
Reserve Bank of New Zealand: Bulletin, Vol. 73, No. 2, June 2010
43
Mori, T and Sasaki H (2007) “Interdependence of production
Appendix 1
and income in Asia-Pacific economies: an international
Abbreviations used in tables
input-output approach”, Bank of Japan Working Paper,
ca
Canada
us
United States
mx
Mexico
gb
United Kingdom
ea
euro area (includes the 12 countries that were its
members in 2006: Austria, Belgium, Finland, France,
Germany, Greece, Ireland, Italy, Luxembourg,
Netherlands, Portugal and Spain)
decoupled? An analysis of production and trade linkages
in
India
using the Asian international input-output table”, European
jp
Japan
Central Bank Working Paper, 993.
cn
China (includes mainland China and Hong Kong)
kr
Korea
tw
Taiwan
sg
Singapore
ph
Philippines
vn
Vietnam
Takagawa I and T Okada (2004), “Estimation of input
th
Thailand
coefficients of the extended international IO table and analysis
my
Malaysia
of interdependency in the Asia-Pacific economy”, Bank of
id
Indonesia
Japan Working Paper Series No. 04-J-6 (in Japanese).
au
Australia
nz
New Zealand
row
Rest of the world
Series No. 07-E-26.
Ohyama S (2004) “Evolution of output multipliers: An
analysis with a particular emphasis on Asia”, Bank of Japan
Working Paper Series No. 04-E-12.
Pula, G and T A Peltonen (2009) “Has emerging Asia
Sasaki, H and Ueyama S (2009) “China’s industrial structure
and its changes in recent years: An analysis of the 1997-2005
input-output tables”, Bank of Japan Working Paper Series
No. 09-E-2.
United Nations (1999) Handbook of input-output table
compilation and analysis, Handbook of National Accounting,
Series F, No.74. New York.
Wixted B, N Yamano and C Webb (2006) “Input-output
analysis in an increasingly globalised world: Applications
of OECD’s harmonised international tables”, OECD DSTI/
DOC(2006)7.
44
Reserve Bank of New Zealand: Bulletin, Vol. 73, No. 2, June 2010
X is the total output for each country (the sum of each row of ID and FD).
Y is the output for each country that goes to final demand (the sum of each row of FD).
This table is available in Excel format from the authors on request.
!
Appendix 2
World input-output table
(2006, USD billions)
Reserve Bank of New Zealand: Bulletin, Vol. 73, No. 2, June 2010
45
Appendix 3
Production and GDP inducement coefficient matrices.
Table A3.1
Production inducement from one-unit increase in final demand.
!
Each cell is the additional production in country i that is induced by a one-unit increase in domestic final demand in country
j (where i represents the rows and j the columns). For example, a one unit-increase in domestic final demand in Canada (ca)
induces an increase of 0.341 units of output in the US.
Table A3.2
GDP inducement coefficient matrix
!
Each cell is the percent of GDP in country i that is induced by a one-percent increase in domestic final demand in country j
(where i represents the rows, and j the columns). For example, a one-percent increase in domestic final demand in Canada
(ca) induces an increase of 0.016 percent of GDP in the US.
46
Reserve Bank of New Zealand: Bulletin, Vol. 73, No. 2, June 2010