Earticle

The Input-Output(IO) model and tables has been usefully used in many different areas of Economics since the model was first pioneered by W. W. Leontief in 1936. Recently Gim and Kim(2005, 2008) found out that there is no consecutive connection between the Leontief inverse and the total output and that there are some limits to compute the impact effects for the initial change of output. The specific objectives of this paper are summarized as follows. ① We clarify the usefulness and limits which is embodied in the open static input-output model as an empirical study. ② We reexamine why the development of a new＂alternative model＂for the traditional Input-Output model is needed. ③ We propose the two alternative models named the Output-Output(OO) model and the Final demand-Final output(FF) model based on the merits and demerits of the model. We finally developed an Output-Output model on the basis of the concept of output requirements matrix for output , in comparison to the IO model. The newly developed OO model can be readily applied, for example, to the impact analysis for output advantageously and effectively without worrying about the consecutive connection and overestimation problems occurred in the net multiplier concept developed by Oosterhaven(2002).

The complemented general relation between two different notions of direct and indirect input requirements( and ) and the decomposition of factors in the output requirements matrix for final demand were proposed by Gim and Kim(2005, 2008). Furthermore we showed that there is consecutive connection between the Leontief inverse and the final demand , but there is no consecutive connection between and the total output .From the research results above, the study objectives of this paper can be summarized as follows. (1) We develop an alternativeOutput-Output(OO) modelwithout having overestimation and consecutive connection problems and compile a newOutput-Output tableon the basis of the OO model to analyse the various economic impacts. (2) We make a comparative study between the input-output table and the output-output table for the complementary using.For the performance of the empirical illustration, we consider an economy with 5 sectors which has been obtained by reaggregating the 28 basic sectors given in the 2003 Input-Output Tables of Korea. Moreover as a specific example for the usefulness of the OO model and table, we formulate the OO multipliers, corresponding to input-output multipliers, that can accept output as an initial change.