Product Technology and Industry Technology: Exploring the Reverse Transformations

Product Technology and Industry Technology: Exploring the Reverse Transformations | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Product Technology and Industry Technology: Exploring the Reverse Transformations Vladimir Motorin This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-1714082/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract One of the main aims of constructing input-output balance models is to assess an impact of exogenous changes in net final demand (certainly at constant prices) on simultaneous behavior of an economy. Nowadays, two approaches to constructing input-output coefficients are widely used in practice, namely, one based on so-called product technology assumption and another based on so-called industry technology assumption. These approaches provide direct transforming supply and use tables (SUT) to symmetric input-output tables (SIOT) in a product-by-product format. Focus of attention in the article is concentrated on analyzing the reverse transformations that link exogenous changes of final demand in SIOT with corresponding changes of the production and intermediate consumption matrices in initial SUT. Material balance equation, classical Leontief equation and product (or commodity) technology model form the system of equations with production and intermediate consumption matrices as unknowns. It is shown that this system has the solution that guarantees the exogenous changes in final demand to be at constant prices. In turn, material balance equation, classical Leontief equation and industry technology model constitute another system of equations (with the same unknowns) that can be also resolved with respect to production matrix and intermediate consumption matrix. However, exogenous varying the final demand in obtained solution leads to quantity changes in the intermediate consumption matrix and to price changes in the production matrix. This type of economy’s response to exogenous changes in final demand seems to be implausible artifact that is out of economic sense. Thus, there are some certain doubts about plausibility of underlying background for an industry technology assumption and a fixed product sales structure assumption that are widely used for transforming SUT to SIOT. JEL Classification: C67; D57 demand-driven input-output model material balance equation exogenous changes in final demand product technology assumption industry technology assumption price and quantity changes Full Text Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-1714082","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":113465484,"identity":"34f80339-e85e-4d93-9b93-36e493913de2","order_by":0,"name":"Vladimir Motorin","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAAwElEQVRIiWNgGAWjYNACAwYGfhCdUECUcmaIFskGkBYDorWAdB2AWkcQ6Lb3H3xcUXAncfP51YkfHhgwyPOLHcCvxezMYWbDMwbPErfdeLtZAugww5mzEwhouZHMJtlgcBio5ewGkJYEg9vEatk84+zmH6Rp2cDfu41IW84cNjYEajGecYN3m0WCgQQRfjne+PBhw5/Dsv39Zzff/FFhI88vTUALDDg2SIBVShCnHATsGfgPEK96FIyCUTAKRhYAAFWMSK8/UPfzAAAAAElFTkSuQmCC","orcid":"https://orcid.org/0000-0003-0924-8275","institution":"National Research University Higher School of Economics Faculty of Economic Sciences: Nacional'nyj issledovatel'skij universitet Vyssaa skola ekonomiki Fakul'tet ekonomiceskih nauk","correspondingAuthor":true,"prefix":"","firstName":"Vladimir","middleName":"","lastName":"Motorin","suffix":""}],"badges":[],"createdAt":"2022-06-01 03:44:50","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-1714082/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-1714082/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":22902257,"identity":"27137d4d-b62f-4e3a-a916-5cc57570fb14","added_by":"auto","created_at":"2022-06-21 16:47:36","extension":"pdf","order_by":2,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":209990,"visible":true,"origin":"","legend":"","description":"","filename":"ManuscriptMotorin.pdf","url":"https://assets-eu.researchsquare.com/files/rs-1714082/v1_covered.pdf"}],"financialInterests":"","formattedTitle":"Product Technology and Industry Technology: Exploring the Reverse Transformations","fulltext":[{"header":"Full Text","content":"This preprint is available for \u003ca href='/article/rs-1714082/latest.pdf' target='_blank'\u003edownload as a PDF\u003c/a\u003e."}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"demand-driven input-output model, material balance equation, exogenous changes in final demand, product technology assumption, industry technology assumption, price and quantity changes","lastPublishedDoi":"10.21203/rs.3.rs-1714082/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-1714082/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eOne of the main aims of constructing input-output balance models is to assess an impact of exogenous changes in net final demand (certainly at constant prices) on simultaneous behavior of an economy. 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It is shown that this system has the solution that guarantees the exogenous changes in final demand to be at constant prices.\u003c/p\u003e\u003cp\u003eIn turn, material balance equation, classical Leontief equation and industry technology model constitute another system of equations (with the same unknowns) that can be also resolved with respect to production matrix and intermediate consumption matrix. However, exogenous varying the final demand in obtained solution leads to quantity changes in the intermediate consumption matrix and to price changes in the production matrix. This type of economy’s response to exogenous changes in final demand seems to be implausible artifact that is out of economic sense. 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