We model production based upon a serially nested function, as we take into account the sequential processing nature of production activities. The sequence of intra-industrial processing is emulated from the inter-industrial hierarchy of value transformation observed in an input--output table. The model we calibrate replicates the records of per-factor price changes, as well as the industry-wide per-factor cost shares for two temporally distant equilibria under the productivity changes that we measure jointly with the elasticity parameters of the production function. By calibrating a 395-sector system based on Japan's linked input--output tables, we find industry-wide productivity changes that are very similar to Tronqvist index. Further, we use this system to evaluate the prospective propagations of a given exogenous productivity change onto the structure of the economy.
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