ABSTRACT
This chapter examines the causes underlying negative values in the inverses generated by the row coefficient and point-estimate gravity coefficient models; and explains why the column coefficient model did not present these problems. It also investigates the hypothesis concerning the point-estimate gravity coefficient model, specified by Leontief and Strout in incremental terms. The chapter provides a brief introduction to the MRIO models. These models are founded on the following economic principle: the total output of an industry is equal to the sum of interindustry demands by various industries and demands by final users of the industry’s output. The column coefficient model always generates non-negative inverses and projections. The row and gravity coefficient models always generate inverses with a large proportion of elements smaller than or equal to zero (non-positive). Also, the row coefficient model frequently generates negative projections.
