EU Science Hub

Input-output economics

Sustainable production and consumption can only be addressed by giving due consideration to economic, social and environmental variables. Policies and measures oriented to support growth and employment must be compatible with long-term sustainability and environmental measures as well as strengthen growth and competitiveness of the European economy.

The analysis of the relationships between economic sectors, micro and macroeconomic variables, and socio-environmental factors is of primary importance to estimate the benefits and costs generated by EU policies. Within this context, Input-Output economics is a field full of potential to investigate impacts generated at different sectorial and geographical levels.

When applied to high sectorial and spatial resolution, Input-Output Economics can be used to investigate the trade relationships between countries and sectors, the changes in production technologies, as well as variation in consumption patterns that such policies may cause.

Within the JRC, Input-Output economics is specifically used to assess the economic, social and environmental effects of European Policies, for instance on industrial competitiveness, growth and jobs, national accounts and input-output tables, environmental regulations (air emissions and pollution, resource efficiency use, etc.), internal market, and globalization (e.g. global supply chains).


Input-Output accounting deals predominantly with the estimation/compilation of supply, use and input-output tables.



The JRC is using the accounting tables presented above to perform Input-Output analysis oriented to provide policy support in the socio-economic and environmental areas. Input-Output analysis serves to estimate impacts in output values, emissions, employment, income, and commodity prices derived from variations in final demand quantities and in unitary prices of factor inputs. They rely on accounting principles.



Input-Output modelling improves the reliability of the impact and forecasting results going beyond a mere comparative static analysis (e.g. dynamic econometric input-output models and CGE models).


Regional Modelling

The JRC performs Input-Output analysis with data for the NUTS-2 regions of the EU Member States with the so-called RHOMOLO-IO modelling framework. This framework employs the Multi-Regional Input-Output (MRIO) dataset which also forms the basis for the dataset used for the calibration of the dynamic spatial CGE model called RHOMOLO.