The Input–Output Framework for Analysing Transmission of Technical Progress between Industries

The aim of this paper is to develop a decomposition technique for analysing how the effects of technical change are transmitted among industries. The technical change in industries is decomposed by comparing the open static input–output model between the initial year and the terminal year. Changes in the use of primary inputs are decomposed into the effect of growth, the effect of structural change in the final demand, the effect of change in the intermediate output coefficients, and the effect of change in the primary input coeficients. The technical effect is composed of the last two effects mentioned. Changes in the cost shares are decomposed into the eflect of change in the primary input coefficients, the effect of change in the intermediate input coefficients, the effect of change in the average factor price of the primary input, and the effect of structural change in the factor price of the primary input. The technical effect is now composed of the first two effects mentioned. The decomposition tech...