Type II errors in IO multipliers

Emonts-Holley, Tobias and Ross, Andrew and Swales, John (2015) Type II errors in IO multipliers. Working paper. Strathclyde Discussion Papers in Economics, University of Strathclyde.

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    Abstract

    This paper compares methods for calculating Input-Output (IO) Type II multipliers. These are formulations of the standard Leontief IO model which endogenise elements of household consumption. An analytical comparison of the two basic IO Type II multiplier methods with the Social Accounting Matrix (SAM) multiplier approach identifies the treatment of non-wage income generated in production as a central problem. The multiplier values for each of the IO and SAM methods are calculated using Scottish data for 2009. These results can be used to choose which Type II IO multiplier to adopt where SAM multiplier values are unavailable.