The Evolution of Production Structures, Analyzed by a Multi-layer Procedure

Abstract

In this paper, a new method of so-called qualitative input–output analysis is outlined, which is called minimal flow analysis (MFA). It extracts the characteristic production structure given in an input–output table, on the basis of anendogenized threshold value. Formally, this is achieved by the binarization of the entries of different table layers which are reformulated according to the Eulerian sequence. The condensed characteristic structure of the economy is then obtained by means of graph theoretical methods. The new method is able to uncover production structures, even in highly aggregated tables. If applied to a chronological sequence of tables, as shown for German tables 1978–88 in detail, the MFA method can disclose the evoluton of sectoral structures.

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