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- Title
Economic Interrelatedness.
- Authors
Chiou-Shuang Yan; Ames, Edward
- Abstract
This paper associates with every input-output matrix an order matrix, and defines for every submatrix of the order-matrix it defines an interrelatedness function. For certain classes of submatrices, the interrelatedness function has an economic interpretation. On closed input-output matrices, where irreducibility is of theoretical importance, irreducibility is associated with a condition on the interrelatedness function. On open input-output matrices, the function is a way of interpreting certain propositions found in economic history. Interrelatedness is also associated with diversification (and hence specialization) in a simple way. It is empirically possible (using Leontief's data for the U.S. economy in 1919 and 1929) to examine the way in which interrelatedness has changed over time, and to make predictions about hypotheses such as technological convergence, which have so far been difficult to subject to empirical analysis. Thus the interrelatedness function is a useful measure in a number of economic contexts.
- Subjects
ECONOMICS; MACROECONOMICS; INPUT-output analysis; MATHEMATICAL functions; DIVERSIFICATION in industry; ECONOMIC models; MATRICES (Mathematics); ECONOMIC indicators; ECONOMIC history
- Publication
Review of Economic Studies, 1965, Vol 32, Issue 4, p299
- ISSN
0034-6527
- Publication type
Article
- DOI
10.2307/2295837