Defining prices in an inter-regional SAM system. Issue 4 (2nd October 2021)

• Record Type: Journal Article
• Authors: Llop, Maria
• Is Part Of: Economic systems research. Volume 33:Issue 4(2021)
• Page Start: 492
• Page End: 508
• Publication Date: 2021-10-02
• Subjects: Price impacts -- inter-regional and intra-regional price transmission -- cost linkages -- social accounting matrix; Input-output analysis -- Periodicals; 339.23
• DOI: 10.1080/09535314.2020.1804331
• Languages: English
• ISSNs: 0953-5314

Abstract

Abstract : The literature of inter-regional social accounting matrices (SAM) focuses on quantity-oriented models that determine the transmission of income impacts. This paper develops a price version to identify the channels of price transmission at the inter-regional (or inter-country) level. The method proposed divides the total multiplier effects into intra-regional price multipliers (i.e. the cost impacts within a region), open loop inter-regional price multipliers (i.e. the cost impacts from one region on another by quantifying all the within-region impacts), and closed loop inter-regional price multipliers (i.e. the circular cost impacts transiting through the accounts in the other region and returning to the starting region). In addition, the intra-regional multipliers are divided into the intra-account, the inter-account and the cross-account (circular) effects. The empirical application, which uses a bi-regional SAM that distinguishes the United States (USA) and China (CHN), highlights the importance of the within-region interdependences for explaining price impacts.