Bachelor 2020/2021

Input-Output Analysis in International Economics

Category 'Best Course for New Knowledge and Skills'

Type: Elective course (World Economy)

Area of studies: Economics

Delivered by: School of World Economy

Where: Faculty of World Economy and International Affairs

When: 4 year, 3 module

Mode of studies: offline

Instructors: Ivan Deseatnicov

Language: English

ECTS credits: 4

Contact hours: 44

Course Syllabus

Abstract

This course deals with the theory of input-output analysis. The objective of the course is to introduce main modern aspects of input-output analysis to empower students with ideas and insights of how to address global economic issues. The course is essentially integrative, drawing on international economics and mathematics for economics courses to show how input-output tables can be used to analyze input-output linkages at the national and multi-regional level. We will pay particular attention to multi-country input-output tables, and their application to global value chain analysis. Classes will be a mixture of lecture and critical discussion of theory, and its application to practical problems.

Learning Objectives

• At the end of the course the student should be able to understand the structure, and work with input-output models,
• The students will be also aware of the advantages and limitations of these types of models.
• The students will be able to apply input-output theory to the analysis of the world economy

Expected Learning Outcomes

• Can calculate Basic measures from OECD Inter-Country Input-Output (ICIO) database. Value added content of gross exports and imports. Decomposition of domestic value added in gross exports.
• Can calculate Final demand measures. Re-exported intermediate imports. Service value-added content.
• Can calculate Value added origin by source country and industry. Value added embodies in exports by final destination. Backward and forward participation in GVCs.
• Can calculate TiVA indicators using World Input-Output Tables (WIOT) database.
• Can apply input-output analysis for understanding world economy.

Course Contents

• Introduction. Review of linear algebra
  Definition of matrix. Matrix operations. Identity matrix. Transposition. Linear equation systems. Division. Diagonal matrices.
• Foundations of Input–Output Analysis
  Notation and fundamental relationships. Input–Output Transactions and National Accounts. Production Functions and the Input–Output Model. The Power Series Approximation of (I − A)−1. Open Models and Closed Models. The Price Model.
• Input–Output Models at the Regional Level
  Single-region models. Many-Region Models: The Interregional Approach. Many-Region Models: The Multiregional Approach. The Balanced Regional Model. The Spatial Scale of Regional Models. Energy, Environmental and Social Extensions.
• Supply-Side Models, Linkages, and Important Coefficients
  Supply Side Input–Output Models. Linkages in Input-Output models. Backward linkage. Forward linkage. The Sherman–Morrison–Woodbury Formulation.
• Introduction to Matlab programming
  Setting programming space. Vector notations. Vector and matrices operations. Loops.
• Calculation of TiVA indicators using Matlab 1
  Basic measures from OECD Inter-Country Input-Output (ICIO) database. Value added content of gross exports and imports. Decomposition of domestic value added in gross exports.
• Calculation of TiVA indicators using Matlab 2
  Final demand measures. Re-exported intermediate imports. Service value-added content.
• Calculation of TiVA indicators using Matlab 3
  Value added origin by source country and industry. Value added embodies in exports by final destination. Backward and forward participation in GVCs.
• Practical application to world economy. Discussion of a scientific paper
  Application of TiVA indicators to world economy. How TiVA can be calculated and analyzed. What are benefits of Input-output analysis for understanding world economy processes.
• Practical application to world economy. Practical work
  Calculation of TiVA indicators using World Input-Output Tables (WIOT) database.
• Practical application to world economy. Final presentations.

Assessment Elements

• Classroom participation and attendance
• Final report
  Based on the knowledge and practical experience obtained students should select several TiVA indicators and compute them using World Input-Output Tables (WIOT). They should describe the concepts and calculation process. The report should be 3-5 pages. In addition, students should submit Matlab code that they used to calculate these indicators.
• Final presentation
  Students should present their final reports by providing rationale for TiVA indicators selection, calculation process and findings.
• Classroom participation and attendance
• Final report
  Based on the knowledge and practical experience obtained students should select several TiVA indicators and compute them using World Input-Output Tables (WIOT). They should describe the concepts and calculation process. The report should be 3-5 pages. In addition, students should submit Matlab code that they used to calculate these indicators.
• Final presentation
  Students should present their final reports by providing rationale for TiVA indicators selection, calculation process and findings.

Interim Assessment

• Interim assessment (3 module)
  0.4 * Classroom participation and attendance + 0.3 * Final presentation + 0.3 * Final report

Bibliography

Recommended Core Bibliography

• Jacques, I. (2015). Mathematics for Economics and Business (Vol. 8th ed). Harlow: Pearson. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1419610

Recommended Additional Bibliography

• ITO Koji, Ivan DESEATNICOV, & FUKAO Kyoji. (2017). Japanese Plants’ Heterogeneity in Sales, Factor Inputs, and Participation in Global Value Chains. Discussion Papers. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.p.eti.dpaper.17117