Pakistan Institute of Development Economics

PDR

THE PAKISTAN DEVELOPMENT REVIEW 

A Summary of Input-Output Studies of The Economy of Pakistan
Author: Ghulam Rasul

The technique of input-output analysis is now being widely used as a tool for development planning. This technique aims at a quantitative evaluation of the processes of production and consumption and the presentation of the results in a single picture. The quantitative relationships existing between different segments of the economy are shown in the form of an input-output flow-table which are then used as coefficients in a mathematical model. The model so formed is intended to reflect the most important economic variables in the system and the interrelationships existing between them. Such a model can indeed be of considerable help in determining consistent sets of economic policy and facilitating the task of the policy maker in making a choice between them. The input-output approach has two distinct aspects. Its more pedestrian side is to depict, by means of a consistent accounting framework, the inter-industry transactions flow-table for the entire system and the interdependence between its sectors for the period to which the data relate. This type of tabulation would obviously be of considerable intrinsic value by way of showing in summarized form the availability of the different types of products classified by industries of origin and their disposal over “intermediate” and “final de¬mand”—the former created by the productive sectors and the latter involving goods which will not be subjected to any further process of production.

Ghulam Rasul

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