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APEC builds expertise on Input-Output tables for economic modelling

APEC Secretariat Singapore | 01 December 2011

As part of efforts to strengthen policy making in the Asia-Pacific, APEC hosted a conference in Singapore examining the use of Input-Output tables, a valuable statistical resource for many economies.

Policy makers, academics and economists from around the region gathered at the conference to build capacity on developing Input-Output Tables (IOTs), used by economies for national accounts and internationally to show the complex linkages between economies.

IOTs are a key tool for economic modelling since they show economic exchanges of goods and services among industrial sectors, said Alexey Ponomarenko, Director of the International Institute for Education in Statistics at the Higher School of Economics, Moscow.

Building a greater understanding of IOTs is important for APEC given its mission to strengthen economic integration in the region. Ideas and decisions on integration should be based on best practice and detailed information such as data and analysis from IOTs, said Dr Ponomarenko, who chaired the November 24-25 conference.

“If policy makers’ understanding of the economy and international economic linkages are refined, it may progressively change the way governments formulate and implement their policies,” he said.

IOTs have enabled deeper understanding of trade patterns in the globalized market place, including modern supply chains, experts told the conference.

Research using IOTs has revealed highly fragmented and sophisticated production networks in the Asia-Pacific region, whose interdependency is deepening and shifting towards China, said Satoshi Inomata from the Institute of Developing Economies of JETRO in Japan.

IOTs are valuable for measuring the value-added component of traded products, because they distinguish between intermediate inputs and final products.

“Value-added measures can change our impression of comparative advantage,” said Dr. William Powers, international economist with the US International Trade Commission.

Increased understanding of value-added trade could have implications for domestic trade policies including the relevance of some protectionist measures, the conference was told.

WTO Senior Statistician Christophe Degain explained that “so-called ‘national products’ may actually be predominantly produced in other economies, while products of foreign trademarks may be manufactured in the domestic market.”

IOTs are also being used to help economies calculate their greenhouse gas emissions from production and international trade. Developing a detailed analysis of economies’ carbon footprint could impact on policies for sustainable economic growth, an APEC priority, the conference heard.

A summary of the conference will be sent to APEC Senior Officials for discussion. The conference was sponsored by Russia’s Ministry of Economic Development and organized by the Higher School of Economics, a Moscow-based National Research University.

Useful links:

The WTO Made In the World Initiative (MIWI)

International Input-Output Analysis Studies Group, IDE-JETRO, Japan

WTO/IDE-JETRO joint publication “Trade patterns and global value chains in East Asia: From trade in goods to trade in tasks”

Koopman et al., 2010, “Give Credit Where Credit is Due”

USITC, 2011, “The Economic effects of significant U.S. import restraints”

Integrated Sustainability Analysis, The University of Sydney

Higher School of Economics (National Research University), Moscow

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