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Three alternative input-output models differing in their treatment of competitive imports are formulated and relations between them examined. The Leontief matrices and their inverses corresponding to the three models are then calculated using the same basic data relating to a 42-industry classification of the Canadian economy in 1949. The predictive performance of these models is tested with reference to 1956. The relative stability of the relations postulated in these models is then discussed on the basis of the results obtained.

No abstract

This paper presents some computations of the impact of exports to various areas of the world in 1956 upon output, employment, and income originating in Canadian industries. It also examines what might have happened if both exports and imports in 1956 had increased by, say, one hundred million dollars; that is, if a balanced increase in foreign trade had occurred. A major purpose of the analysis is to illustrate a method by which the effects of such an increase on the industrial distribution of output, employment, and income might be estimated. The analysis includes, in addition to the direct effects, the indirect effects on industries which produce materials or other inputs used by the industries directly affected by foreign trade. Inter-industry input-output analysis has been used to estimate these indirect effects. Secondary effects resulting from the changes in income induced by the changes in foreign trade are, however, not included in the analysis.The year 1956 was chosen largely as a result of statistical convenience. As a result of previous work by the present authors, a large body of inter-industry statistics for 1956 exists. This made it possible to “update” the 1949 input-output matrices to 1956 by a technique which will be explained below so that it could be used in conjunction with the export figures specially prepared for this study.