A note on linkage between gross value added and final use at the industry level. Issue 3 (2nd July 2020)

• Record Type: Journal Article
• Authors: Cai, Junning; Leung, PingSun
• Is Part Of: Economic systems research. Volume 32:Issue 3(2020)
• Page Start: 428
• Page End: 437
• Publication Date: 2020-07-02
• Subjects: Input–output model -- gross domestic product (GDP) -- gross value added (GVA) -- final use -- sustainable development goals (SDGs); Input-output analysis -- Periodicals; 339.23
• DOI: 10.1080/09535314.2020.1718617
• Languages: English
• ISSNs: 0953-5314

Abstract

ABSTRACT: Gross value added (GVA) is a common indicator of an industry/sector's economic performance. While an economy's total GVA is always equal to its total final use, an individual industry/sector's GVA is usually not equal to its final use. Yet an accounting identity between an industry/sector's GVA and the final use of multiple industries/sectors can be established by a gross value added-final use (GVA-FU) matrix. This paper derives the GVA-FU matrix in the Leontief demand-driven model and its equivalence in the Ghosh supply-driven model and interprets the matrix from different perspectives. The GVA-FU matrix can help policymakers and practitioners better understand an industry/sector's percentage of gross domestic product (GDP) – the underlying measure behind the United Nations Sustainable Development Goals (SDGs) Indicator 14.7.1 – from the demand-side perspective and facilitate its proper use for policy and planning. The GVA-FU matrix can become a standard component of the input–output apparatus for multiple applications.