Work detail

The Strengths and Limitations of Input-Output Analysis in Evaluating Fiscal Policy

Author: Mgr. Lenka Líšková
Year: 2015 - winter
Leaders: PhDr. Jaromír Baxa Ph.D.
Work type: Finance, Financial Markets and Banking
Language: English
Pages: 77
Awards and prizes:
Abstract: The thesis addresses the recent debates on suitable macroeconomic
policy and calls for an alternative evaluation and forecasting method
of economic impact, by assessing the applicability of Leontief’s inputoutput
model. We concentrate on providing an insight into the entire
process of input-output analysis, which yields computation of simple
input-output multipliers - output, gross value added and income multipliers.
Thanks to the ability to capture linkages in the economy, computed
multipliers are used as a tool to evaluate the effects of vehicle
scrappage schemes and ICT infrastructure investment subsidies applied
within a sample of diverse developed countries - Australia, Germany,
Japan, UK and USA. We also aim to provide a sufficient explanation
of the input-output model and a computation manual based on the
example of the Leontief open model and calculation of simple multipliers.
In our research, we numerically evaluate the effects of fiscal stimulus
measures in the automobile industry and ICT sector and provide
their comparison among 5 countries with different industry structures.
Most importantly, the thesis provides a suggestion for policy makers
to consider applying input-output analysis, as an alternative method,
accounting for its strengths and limitations, when evaluating the effects
of fiscal policy




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