A revision of the tolerable limits approach: Searching for the important coefficients

Miguel Ángel Tarancón, Fernando Callejas, Erik Dietzenbacher, Michael L. Lahr

Research output: Contribution to journalArticlepeer-review

18 Scopus citations

Abstract

A wide range of approaches are available for classifying coefficients according to their importance to an economy. The 'tolerable limits' approach is one that has been extensively written about. Nevertheless, it seems unsuitable for assessing the overall importance of a coefficient to an economy, but instead appears to be rather well suited for determining how much a selling sector depends upon its customers. We therefore suggest two alternative approaches for measuring a sector's importance to an economy. The first is an application of the concept of elasticity based on Sherman and Morrison's (1950) formula. The second approach applies linear programming. We compare these various alternatives using the domestic IO tables of eight European countries.

Original languageEnglish (US)
Pages (from-to)75-95
Number of pages21
JournalEconomic Systems Research
Volume20
Issue number1
DOIs
StatePublished - Mar 2008

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Keywords

  • Elasticity
  • Important coefficients
  • Linear programming
  • Tolerable limits

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