Chapter 5A Method for Estimating Unknown National Input–Output Tables Using Limited Data

Thomas P. Oléron Evans and Robert G. Levy

5.1 Motivation and Aims

In Chapter 4 of the companion volume to this book, Global Dynamics, we define an economic model (the ENFOLDing model) combining data on international trade from the United Nations COMTRADE database with data representing the transfer of goods, services and money between economic sectors within national economies, drawn from the World Input-Output Database (WIOD), to produce a demand-driven model of global trade.

When introducing the ENFOLDing model, we noted that WIOD contains data on only 40 countries. However, the ENFOLDing model was designed to be a comprehensive model of world trade, making full use of the COMTRADE data to comprehensively track trade flows between all the countries of the world.

We originally addressed this through the introduction of an entity labelled ‘Rest of World’, which acts as a source and sink for all trade that occurs between those countries that are explicitly included in the model and those that are not. Although WIOD countries represent some 70% of global economic activity, this nevertheless means that a huge amount of activity cannot be represented. However, it should be noted that a Rest of World entity would always be necessary, even if input–output data were available for every country.

There are two main reasons for this. Firstly, many of the regions included in the COMTRADE database ...

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