Are there key sectors? an appraisal using applied general equilibrium

M. Alejandro Cardenete, M. Carmen Lima, Ferran Sancho

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Abstract

An extension of the hypothetical extraction method to a general equilibrium setting is considered. This has the advantage of re-interpreting output changes as efficiency gains or losses, which may be of use in identifying "key" sectors in an interconnected economy. The categorization may be relevant for the evaluation of intersectoral synergies and for improving policy planning and orienting economic strategy. We argue that the standard measures based on gross outputs may not capture all of the relevant impacts and this is so because of some self-imposed modeling and accounting limitations. An economy-wide Computable General Equilibrium (CGE) approach provides a modeling platform that overcomes these limitations since it offers (i) a more comprehensive measure of linkages and (ii) an alternative way of accounting for linkages' relevance that is in closer accordance with the standard statistical magnitudes used in national or regional accounts. © Southern Regional Science Association 2014.
Original languageEnglish
Pages (from-to)111-129
JournalReview of Regional Studies
Volume43
Issue number2-3
Publication statusPublished - 1 Jan 2014

Keywords

  • Applied general equilibrium
  • Economic impulse
  • Hypothetical extraction
  • Key sectors
  • Sectoral efficiency

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