Friday, October 16, 2009


More on the Nordhaus project in a later blog but in this one I want to go back to one of the themes of this blog - interdependencies and geographies. One of the key data sources for information on the workings of modern economies comes from input-output data. Simply put this data is based on the concept that industries both produce and consume commodities. These interactions can then be developed as a matrix alongside others inputs such as labour etc as well as outputs that leave the system e.g. finished goods and exports.

However, the core industry X industry matrix can tell us a lot about the uniqueness of each economy

Input-output data is now available for a very wide range of countries and spanning a number of decades in some instances.

There are many ways that I-O data can be mapped or developed (there is an entire journal devoted to this data (Economic Systems Research), however I have my own favourite which I developed about 18 years ago. I call these images econscapes.

You can see in this image that Australia has large industry complexes in both the resource based activities (agriculture, minerals and food) in the bottom left of the diagram as well as services (top right).

In contrast we could compare Australia with a country like Germany. In this diagram you can se much more activity across the middle diagonal line (manufacturing clusters).

Such diagrams are useful as there allows us to visualise the differences between countries so they are like economic structure fingerprints.

But there is a problem, these are done as a share of national GDP so although they are comparable in terms of relativities they are not directly comparable. More on this in the next post.

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