Sources of Structural Change in Input–Output Systems: A Field of Influence Approach

Abstract

The analysis of structural change with input–output (IO) tables is extended beyond the initial ideas of Chenery and Watanabe, and beyond the recent applications of Feldman et al. and Dewhurst, to embrace a more comprehensive view. With this perspective, change is decomposed into three initial components, and these components are further divided into change initiated within the sector and outside the sector. The analysis is then linked with the notion of a ‘field of influence of change’ to provide a more complete view of the way in which changes penetrate the rest of the economic system. The analytical perspectives are illustrated with applications to a three-sector set of IO tables for the US economy for the period 1948–77.