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Looking for the inverted pyramid: an application using input-output networks

Cahen-Fourot, Louison, Campiglio, Emanuele, Dawkins, Elena, Godin, Antoine and Kemp-Benedict, Eric (2020) Looking for the inverted pyramid: an application using input-output networks. Ecological Economics, 169. ISSN 0921-8009

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Identification Number: 10.1016/j.ecolecon.2019.106554

Abstract

Herman Daly's view of the economy as an “inverted pyramid” sitting on top of essential raw material inputs is compelling, but not readily visible in monetary data, as the contribution of primary sectors to value added is typically low. This article argues that “forward linkages”, a classical development theory concept capturing the relevance of a sector for downstream activities, is an informative and complementary measure to identify key sectors. Using Input-Output (IO) data from eighteen European countries, we identify mining as the sector with the highest average forward linkages, and confirm the consistency of this result across countries via cluster analysis. By treating IO tables as the adjacency matrix of a directed network, we then build and visualise national inverted pyramid networks, and analyse their structure. Our approach highlights the role of natural resources in providing the necessary inputs to modern European economies.

Item Type: Article
Official URL: https://www.journals.elsevier.com/ecological-econo...
Additional Information: © 2019 Elsevier B.V. All rights reserved.
Divisions: Grantham Research Institute
Subjects: H Social Sciences > HB Economic Theory
JEL classification: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods and Programming > C67 - Input-
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O10 - General
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q32 - Exhaustible Resources and Economic Development
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q57 - Ecological Economics: Ecosystem Services; Biodiversity Conservation; Bioeconomics
Date Deposited: 29 May 2020 09:21
Last Modified: 28 Jun 2020 23:30
URI: http://eprints.lse.ac.uk/id/eprint/103852

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