By: Dr. Hashim Al-Ali,
Senior Macroeconomic Planning and Fiscal Management Advisor
Ottawa, Ontario, CANADA.
Orouba Sabbagh (Ms.)
Senior Economist and Research Coordinator
The main objective of this paper is to share our own practical experience in structuring and in application of the input-output tables for an upper-middle income developing economy. This, however, includes building and updating series of input-output tables, which are detailed set of economic accounts and their uses in modeling for projections, planning and analysis of the Jordanian economy. The tables were to be structured for the year 2010.
The basic assumption on setting up here was that the input-output table would be based, as far as possible, on independent Jordanian data of 2010 together with full use of the existed Jordanian input-output tables for 2006, for deriving such tables from published data.
Building of the Input-Output tables and their transformation into a model of the economy as well as using them as an effective tool for economic analysis and planning was pioneered in America during the 1930‟s by W. Leontief. Nowadays, this work has been developed extensively both at the national and regional levels.
An input-output tables record the sales or purchases between all sectors in an economy, usually within a particular year. Typical tables identify several dozen of such sectors and show the structure of an economy in a precise and detailed way. There are several types of table each showing a different aspect of the economy, e.g. the pattern of purchases, sales, capital investment and imports.
In constructing and examining these tables it is necessary to make a distinction between commodities and industries. A commodity is an artefact, substance or service, while an industry produces various commodities and is defined by its principle commodity, thus the cooking oil and olive oil industry chiefly makes oil. An industry may also make other secondary commodities, for example, the oil industry also makes and repairs small number of plastic products such as bottles and containers. Thus, while the commodity in an absolute concept; an industry may vary in time or from one country to another by virtue of having different secondary commodities.
To reduce this task to manageable proportion the commodities and industries are grouped into sectors of similar types and technologies. Jordanian table would have 81 such groups. Furthermore, the paper would shed a light on the imperative areas and dimensions of uses and applications of the input-output tables and techniques in economic analysis, development planning, impact studies and fiscal management for the economy.