Various Definitions of Direct and Indirect Requirements in Input-Output Analysis: a Comment and Further Developments

Abstract

In input-output analysis many definitions of direct and indirect requirements are used. This paper argues that the definition of indirect input requirements used by the U. S. Department of Commerce and suggested by part of the literature (the difference between total and direct requirements) is misleading since total and direct requirements are not homogeneously defined. The paper also identifies the conditions to be met in order to compare performances at system level and the performances at industry levels. Finally it shows that the difference between performances at system level and performances at industry level is explained simply by their different product-mixes