Iranian Journal of Economic Studies. A Comparative Analysis of Sectoral Multipliers of Input-Output Model and Social Accounting Matrix

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1 Iranian Journal of Economic Stuies, 6(2) 2017, Iranian Journal of Economic Stuies Journal homepage: ijes.shirazu.ac.ir A Comparative Analysis of Sectoral Multipliers of Input-Output Moel an Social Accounting Matrix Ali Fariza, Ali Asghar Banouei Faculty of Economics, Allameh Tabataba i University, Tehran, Iran. Article History Receive ate: 11 October 2017 Revise ate: 11 January 2018 Accepte ate: 23 January 2018 Available online: 23 January 2018 JEL Classification: C67 D24 D57 E12 E16 E23 Keywors: Input-Output Table Social Accounting Matrix Sectoral Output Multipliers Sectoral Supply Multipliers Leontief Deman-Driven Approach Ghosh Supply-Driven Approach Abstract The present stuy is to inicate that the comparison between sectoral prouction multipliers of an input-output (I/O) moel an a social accounting matrix (SAM) framework is almost impossible without taking into account accounting balances an theoretical consierations. Theoretically, the I/O moel provies the Leontief s prouction function, on the basis of which sectoral output multiplier can be erive. In a SAM, however, the combine Leontief-Keynes moels ominate multipliers commonly known as accounting multiplier matrices. The interinustry blocks of these matrices cannot be calle sectoral output multipliers as in an I/O moel, rather they are known as sectoral supply multipliers. Therefore, the two sectoral multipliers are of ifferent nature an cannot be compare for assessing sectoral performance an sectoral policy analysis of the key sectors. In the light of these evience, this important question can be pose that whether it is possible to compare sectoral multipliers of the two approaches or not? To investigate this, two atabases were use, namely the conventional I/O tables an SAM. The ata for both sets of tables, prepare by the Research Center of the Islamic Parliament for the year 2011, were aggregate into sectors. The overall results inicate that sectoral output multipliers of a conventional I/O moel grossly overestimate multipliers of key sectors while sectoral supply multipliers of a conventional SAM unerestimate multipliers of the key sectors. To solve the problem an make sectoral multipliers of the two approaches comparable, euction of imports has been propose. The overall finings showe that sectoral output multipliers of a conventional I/O moel were overestimate about unit on average an sectoral supply multipliers of a conventional SAM were unerestimate about unit on average. Consiering the omestic I/O moel an SAM, however, it was observe that sectoral output multipliers is on an average in omestic IOM whereas in omestic SAM sectoral output multipliers is on an average Consequently, the two approaches were comparable in sectoral policy analysis. afariza@yahoo.com DOI: /ijes , Shiraz University, All right reserve

2 144 Fariza & Banouei, Iranian Journal of Economic Stuies, 6(2) 2017, Introuction The aggregate keynsian economics can be visualize as an aggregate proucer an an aggregate consumer. Its consumption multiplier can be consiere as a riving force for the income istribution (Ghosh an Sengupta, 1984). On the basis of the classification of Marx, consiering Marxian class theory, Kalor, Passenetti an Kalecki in 1960s extene the Keynesian macro - economic moel of a single proucer an a single consumer into a moel of a single proucer an two consumers (Labors an Capitalists), i.e. which is also calle the extene post keysian moel (Banouei, 1989). On the one han, as main ata requirements for both approaches come from the macro national accounts, socio-economics analysis of structures of prouction an income istribution are beyon the scope of these moels. On the other han, however, analyzing structure of prouction an the matrix of Prouction multipliers oes play an important role in Leontief s moel of many proucers an a single consumer (IOM). Leontief assumes househols as an exogenous variable which seizes analysis of the structures of prouction an income istribution (Banouei an Mahmoui, 2001) The introuction of social accounting matrix (SAM) mae it possible to comprehensively isaggregate accounts an sub-accounts of the social an economic groups of househol sector along with the other accounts in a consistent format with a matrix structure. As compare to the sectoral output multipliers of IOM, the isaggregate accounts in SAM a a flavor of flexibility to SAM multipliers in analyzing the social an economic aspects, the accounting mechanisms encompasse in the IOM an SAM frameworks are in ifferent nature. For instance, accounting balances in the conventional IOM reveal a balance between omestic supply an eman with net trae, i.e. exports minus imports, whereas in the SAM framework, the balances for every account are organize in terms of total supply an total eman. The former provies sectoral output multipliers which have their roots in the Leontief s prouction function, whereas the latter provies sectoral multipliers which are currently known as sectoral supply multipliers 1. The above observations suggest that the two sectoral multipliers are of two ifferent nature, an therefore, cannot be compare for sectoral policy analysis an ientification of key sectors. 2 Therefore, an important question is raise: Is it possible to make sectoral multipliers of the two approaches comparable? In the present stuy, it is propose that the pose question still remains unanswere after excluing imports from both input output table (IOT) an SAM. The main reason for this 1 In recent years, such terms as sectoral output multipliers an sectoral supply multipliers have attracte the attention of the regional IO analysts. For more information on the technical aspects of these terms refer to: Flegg an Tohmo (2015), Krorenberg (2009) an Krosenberg (2012). 2 The IOT can usually be erive from the SAM. Since an IOT oes not take into account the inuce effects while the SAM is more compatible with the real worl, because in aition to irect an inirect effects, it also consiers inuce effects. Accoringly, the results of the two methos are not the same. The present stuy takes these consierations into account in pursuing its objectives.

3 Fariza & Banouei, Iranian Journal of Economic Stuies, 6(2) 2017, is that sectoral multipliers excluing imports from IOT an SAM woul represent sectoral omestic output multipliers. Regaring these, two sets of ata base for the year 2011 have been employe. One set is relate to the conventional IOT an SAM, incluing imports for 72 sectors, an the other one is concerne with omestic IOT an SAM for the same sectoral classification. For ease of analysis, ata for both sets of tables have been aggregate into 21 sectors. With regars to all the above issues, this paper is presente in the following way. The theoretical approaches concerning multipliers in IOM an SAM approaches will be examine in Section One. Section Two focuses on the importance of import euction for making prouction coefficients of the two mentione approaches comparable. Database an ajustments are examine in Section three. The empirical results of the present stuy will be iscusse in Section Four an, finally, the paper ens with a summary iscussion an conclusions of the research results. 2. Theoretical comparison of IOM an SAM Multipliers Regaring IOM's approach, the prouction equation introuce as Equation 1 is employe: (1) Table 1. The Structure of the simple input-output table From(i) Processing Purchases by Final Deman Total Deman To (j) Sectors Processing X ij f i x Sectors i Payment Sectors )Value Ae( v j Domestic Outlay Import Total Supply Source: Miller an Blair (2009). x j m j x j Base on the Table 1, Equation 1 inicates that total output equals to intermeiate consumption ( X ) an final eman ( ij f i ). Accoringly, it can be assume that j th sector must use a ij units from sector i, which is known as Leontief prouction function, in orer to prouce 1 unit. This relationship has been represente with Equation 2: a 1 ij X ij x j (2)

4 146 Fariza & Banouei, Iranian Journal of Economic Stuies, 6(2) 2017, where x refers to the iagonal matrix of total output, i.e. omestic supply. j Equation 2 can be rewritten using Equation 3 an Equation 2 replacing in the equation (1): X a x (3) ij ij j x a x f (4) i j ij j Consiering that A i a, we have: ij x Ax f (5) 1 x ( I A) f (6) Consequently, base on the Table 1, the following observations can be mae: - Regaring Leontief's approach, prouction function is base on Leontief prouction function in which inputs (or factors) of prouction are employe with constant ratios; therefore, total output is employe for Leontief's approach in the IOM. So, the IO system structure is base on the constant ratio of prouction assumption an lack of substitution possibility of prouction methos. 1 - Base on Equation 6, ( I A) is the Leontief inverse matrix which is known as the prouction multiplier. - The accounting balances in IOM reveal the balance between omestic supply an omestic eman with net trae (exports minus imports). Consequently, Y C G I E M (7) Where Y refers to omestic output, M to import, C to consumption, I to investment, an E to export. In this equation, Y stans for omestic supply, C G I refers to omestic eman, an E M refers to net trae. - The IOT, Table 1, represents omestic supply, output, an omestic eman plus net trae the values of which are precisely equal to the aggregate expeniture in the Keynesian moel. Therefore, the IOT results in table 2. Table 2. The main structure of the simple input-output table From(i) Processing Final Deman + Domestic Deman To (j) Sectors Net Export Processing Sectors Payment Sectors )Value Ae( Domestic Supply X ij v j x j f i x i

5 Exogenous Accounts Enogenous Accounts 1.Processing Sectors 2.Prouction Factors 3.Institutions 4. Other Accounts Fariza & Banouei, Iranian Journal of Economic Stuies, 6(2) 2017, Leontief sectoral output multiplier focuses only on inter-sectoral linkages in economy, but it has no sensitivity to the sector linkages relate to the consumption an income of institutions (househols). The SAM approach, in return, reflects the prouction cycle view for the whole economy with no constraint on etaile classification of ifferent socio-economic groups an enogenous prouction factors an institutions. Table 3 represents the SAM base on exogenous an enogenous accounts at the macro level. Table 3. The Macro structure of SAM in terms of exogenous an enogenous accounts Exogenous Enogenous Accounts Accounts From(i) To (j) Total Deman 1.Processing Sectors 2.Prouction Factors 3.Institutions T n x n y 4. Other Accounts l n r x y Total Supply y y x As Table 3 shows, the prouction multiplier of SAM comprises a simultaneous relation between prouction sectors, income of prouction factors an omestic economic institutions. Therefore, y T x (8) n n where ˆ y y i n x i [ ] (9) where y ˆ is iagonal matrix of the total supply calculate by the sum of omestic supply an import. It is worth mentioning here that import is in the rest of the worl account (exogenous account) which is part of the SAM. After replacing Equation 8 with Equation 9, we have: y n an x B y x (10) n

6 148 Fariza & Banouei, Iranian Journal of Economic Stuies, 6(2) 2017, y ( I B ) x (11) n 1 n Accoringly, base on Table 3, the following observations can be mae: - In the SAM framework, the combine Keynes- Leontief moel ominates multipliers commonly known as the accounting matrix multiplier. - In the SAM framework, the balances of every account are achieve in terms of total supply an total eman 1. Base on inter-inustrial block of the SAM, therefore, one can estimate sectoral multipliers currently known as sectoral supply multipliers. 1 - ( I B ) is known as an accounting multiplier an, in the absence of n consumption elasticity consierations, the equality of average propensity an marginal propensity to consume is prevaile 2. - The balance of SAM is in terms of aggregate supply an aggregate eman is similar to national accounts in macroeconomic relations. Base on the aforementione observations, a ifference in technical coefficient was observe between the IOT (A ij ) an the SAM approach (B ij ). This istinction is ue to the fact that the balance is create in between omestic supply an omestic eman with net trae in the IOT an between aggregate supply an aggregate eman in the SAM approach. The former gives sectoral output multipliers which have their root in the Leontief s prouction function whereas on the basis of the inter-inustry block of the latter, the sectoral multipliers estimate which are currently known as the sectoral supply multipliers. Therefore, the two sectoral multipliers are of ifferent nature an cannot be compare in terms of sectoral performance assessment an sectoral policy analysis, especially in ientifying key sectors. These can lea to an important question: is it possible for the sectoral multipliers of the two approaches to become comparable? To investigate this, one nees to look into treatment of imports in the IOM an SAM approaches. 3. The Importance of Import Deuction in the IOM an SAM Approaches In section 1 of the present stuy, it was observe that the sectoral multipliers of the IOM an SAM are of ifferent nature an cannot be compare for analytical purposes. To solve this problem; therefore, import euction has 1 This is not necessarily a funamental principle in the SAM. The woring is for the sole purpose of making a ifference between the IOT an the SAM from the point of view of the import position. Therefore, the terms use, incluing the total eman an the total supply or the total output an the total input can be use in each case. 2 It is worth mentioning here that for the calculation of average irect coefficients an average multipliers, two assumptions are require. First, economy has an excess capacity, an there is no constraint in the supply sie. (See Banouei,2011b; Fariza et al.,2012; Fariza et al., 2014; an Khaleghi et al.,2015 for more information). Secon, prouction technology an prouction factors for a given statistical year are known.

7 Fariza & Banouei, Iranian Journal of Economic Stuies, 6(2) 2017, been suggeste. Accoring to the national accounts an sector accounting systems, imports can be of three ifferent types, namely intermeiate, consumption an capital goos which are respectively combine with intersectoral intermeiate matrix, final eman, an the other enogenous an exogenous accounts in the SAM. Uner this situation, we expect overestimation of output multipliers in the IOM an unerestimation of supply multipliers in the SAM approach. This creates ifficulty in the evaluation of key economic sectors an economic policy. For solving this problem, we separate imports in the IOM an SAM approaches, an then to create a omestic inter-sectoral intermeiate matrix, in such a way that the balance in the IOT an SAM will be comparable. There are three methos for euction of imports. (Banouei, 2011a; Pasha et al. 2013; an The Research Center of the Islamic Parliament, 2011). In the present stuy, the thir metho for eucting imports of intermeiate, consumption an capital goos has been use (Banouei, 2003; an Banouei, 2011a). Determining the nature of import with a given assumption in the IOT is the responsibility of the table esigners. Regarless of the competitive or non-competitive assumption, it is not possible to use the methoology or metho of eucting imports provie by economic researchers or statistical institutions. Consiering factors such as ifferences in natural resources or climate types of ifferent countries as some criteria for istinguishing between competitive an noncompetitive imports, it can be observe that the combination of competitive an uncompetitive imports varies from country to country. In this stuy, it is assume that imports can be use for istinguishing a competitive nature. 4. Data Base IOT an SAM for the year 2011 provie by the Research Center of the Islamic Parliament of Iran were use to operationalize the mentione methos. The symmetric IOT was of an inustry-by-inustry type an the inustry technology assumption was assume. The ata relate to both sets of tables were aggregate into sectors. 5. Analysis of Empirical Results Two types of ata base were use for empirical purposes. The first type was the conventional IOT which was base on the balance of omestic eman an supply with net trae an SAM base on total eman an supply. The secon type, the omestic IOT an the omestic SAM, an their balance was base on total output or omestic supply. Prouction multipliers 1 of the 21 sectors were calculate using Leontief eman-riven approach ( i.e. through estimation of the normalize backwar irect an inirect multipliers) an the Ghosh supply-riven moel, through normalize backwar multipliers with irect an inirect effects. The results have been presente in Tables The calculation of key sectors was base on matrix relationships an one with Excel software, an the entire calculation process is reserve for authors.

8 150 Fariza & Banouei, Iranian Journal of Economic Stuies, 6(2) 2017, Table 4. Key sectors in the conventional IOT, base on normalize sectoral output multipliers Normalize Key Sectors Backwar Key Sectors Multipliers Manufacture of basic metals Manufacture of woo an paper proucts Normalize Forwar Multipliers Manufacture of textiles an wearing apparel Manufacture of basic metals Manufacture of woo an paper proucts Manufacture of refine petroleum an other chemical proucts Manufacture of other non-metallic mineral proucts Manufacture of refine petroleum an other chemical proucts Manufacture of other non-metallic mineral proucts Manufacture of textiles an wearing apparel Table 5. Key sectors in the conventional SAM, base on normalize sectoral supply multipliers Key Sectors Normalize Backwar Key Sectors Normalize Forwar Multipliers Multipliers Wholesale an retail trae an repair of motor vehicles an motorcycles Wholesale an retail trae an repair of motor vehicles an motorcycles Human health activities Banking an Insurance Transport, Postal an courier activities Manufacture of foo proucts an beverages Banking an Insurance Manufacture of foo proucts an beverages Transport, Postal an courier activities Human health activities

9 Fariza & Banouei, Iranian Journal of Economic Stuies, 6(2) 2017, Consiering Tables 4 an 5, the following observations were mae: - As the 21-sector conventional IOT reveals, the normalize sectoral output multipliers for 6 sectors have been more than one unit, above the average. Furthermore, the highest sectoral output multipliers have been associate with the manufacture of basic metals an woo an paper proucts. The results show that all of the normalize sectoral output multipliers are inustrial-type sectors. Agricultural sector is a key economic sector,, base on the IOM, however, inustry has ha the largest number of key sectors. - The results concerning the normalize sectoral backwar an forwar multipliers, base on the conventional SAM, have been epicte in Table 5. In comparison to the IOM, the SAM approach provies ifferent results regaring the key economic sectors. For instance, as one can see, agriculture an wholesale an retail trae services have ha the highest normalize backwar an forwar supply multipliers. It can also be observe that the key sectors of the two approaches, without any consieration to the nature an existence of import in inter-sectoral relationships, are not comparable from a theoretical point of view. Therefore, appropriate policies cannot be aopte with only taking into account the key sectors of the two approaches. - With regar to the aforementione theoretical basis, the Leontief eman-riven moel, the Leontief prouction function can be estimate through a 1 ij X ij x j where x j is a iagonal matrix of total output. Regaring the SAM approach, an taking into account -1 B T y n n estimate through, however, there is no prouction function, because B n is y which is the sum of total output an import. Therefore, it sectoral output multipliers are expecte that to be smaller than sectoral supply multipliers. - As Tables 4 an 5 show, there is an overestimation of sectoral output multipliers, of about unit, on average in the conventional IOM an an unerestimation of sectoral supply multipliers, of about unit on average, in the conventional SAM. Consequently, sectoral policy analysis cannot be suitable for comparing the two approaches. Tables 6 an 7 emonstrate the results after import euction.

10 152 Fariza & Banouei, Iranian Journal of Economic Stuies, 6(2) 2017, Key Sectors Manufacture of basic metals Manufacture of refine petroleum an other chemical proucts Manufacture of woo an paper proucts Manufacture of other non-metallic mineral proucts Key Sectors Wholesale an retail trae an repair of motor vehicles an motorcycles Banking an insurance Transport, Postal an courier activities Electricity, Water an istribution of Natural gas Real estate activities Manufacture of foo proucts an beverages Table 6. Key sectors in the omestic IOT, base on normalize sectoral output multipliers Normalize Backwar Key Sectors Multipliers Coefficients Manufacture of other non-metallic mineral proucts Manufacture of basic metals Manufacture of refine petroleum an other chemical proucts Manufacture of woo an paper proucts Table 7. Key sectors in the omestic SAM, base on normalize sectoral output multipliers Normalize Backwar Key Sectors Multipliers Coefficients Manufacture of foo proucts an beverages Real estate activities Electricity, Water an istribution of Natural gas Banking an Insurance Wholesale an retail trae an repair of motor vehicles an motorcycles Transport, Postal an courier activities Normalize Forwar Multipliers Coefficients Normalize Forwar Multipliers Coefficients

11 Fariza & Banouei, Iranian Journal of Economic Stuies, 6(2) 2017, Concerning the key sectors, imports were separate from the conventional IOM an SAM an the following results were reveale: - After import euction, sectoral output multipliers were calculate through the two approaches. Base on the results, sectoral supply multiplier coul not be applie to the SAM an omestic IOM. - Base on omestic IOM, as Table 6 epicts,, inustrial sectors, such as manufacture of basic metals an manufacture of other non-metallic mineral proucts appeare to be propellant sectors. Furthermore, agricultural sector ha the last rank, base on normalize backwar an forwar output multiplier. - The results in Table 7, concerning the omestic SAM,, show that key sectors have concentrate in the service sectors. This is similar to what was observe in the conventional SAM. Sectoral output multipliers an sectoral supply multipliers were ifferent in their rankings, however. - Base on the results of Tables 6 an 7, sectoral output multipliers an average of unit in the omestic IOM but an average of unit in the omestic SAM. Consequently, the two approaches are comparable in sectoral policy analysis. The results concerning the comparison of the conventional an the omestic IOM reveale an overestimation of sectoral output multiplier in which the average sectoral output multiplier was about unit for the conventional IOM whereas it was about unit for the omestic IOM. Furthermore, the results concerning the comparison of the conventional an the omestic SAM reveale that the average sectoral supply multiplier was about unit for the conventional SAM whereas it was about unit for the omestic SAM. Therefore, there was an unerestimation of sectoral supply multipliers in the SAM. (Tables 8 an 9). In the following tables, the key sectors have been compare base on the two approaches. Table 8 emonstrates the comparison of the key sectors in the conventional IO an SAM, mae through calculation of the average sectoral output multipliers an the average sectoral supply multipliers. As it can be seen, the key sectors have reveale multipliers with higher than unity, base on the normalize irect an inirect backwar an forwar linkages. The results further show that key sectors of the conventional IOM have concentrate in inustrial sectors while key sectors of the conventional SAM have concentrate in agriculture an service sectors. Consiering ifferent theoretical approaches for comparing the conventional IOM an SAM, the two aforementione multipliers an the selecte key sectors cannot be compare. The enogenous prouction account along with the enogenous prouction factors an institutions woul lea to concentration of the key sectors in the conventional SAM in agriculture an service sectors.

12 154 Fariza & Banouei, Iranian Journal of Economic Stuies, 6(2) 2017, Table 8. Comparison of key sectors in the conventional IO an SAM (base on average sectoral output multipliers an average sectoral supply multipliers) Rank Key Sectors of the Conventional IO Key Sectors of the Conventional SAM 1 Manufacture of basic metals 2 Wholesale an retail trae an Manufacture of woo an paper repair of motor vehicles an proucts motorcycles Manufacture of refine petroleum an other chemical proucts Manufacture of textiles an wearing apparel Manufacture of other nonmetallic mineral proucts Transport, Postal an courier activities Manufacture of foo proucts an beverages Human health activities Banking an Insurance As it can be seen from Table 9, key sectors are comparable because omestic the IO overestimate the sectoral output multipliers an SAM unerestimate the sectoral output multipliers. Consequently, the results emonstrate that: - Rankings of some sectors change. For example, for the omestic IOM, manufacture of other non-metallic mineral proucts is in the 3 r place while it was in the 5 th place before. Manufacture of basic metals sector has not change its position, however. Although manufacture of textiles an wearing apparel has been reveale as one of the key sectors base on the conventional IOM, it has not been consiere as a key sector an has been remove base on the omestic IOM. - The comparison between rankings of key sectors base on the conventional an omestic SAM shows that agricultural sector has hel the same rank. Some sectors, such as real estate activities an electricity, water an istribution of natural gas have not been ranke as key sectors base on the conventional type, but ranke as key sectors base on the omestic SAM. - Although there has been no similarity between key sectors of the IOM an the SAM, ue to the social effects of the SAM, changes in the ranking of the key sectors an removal of some key sectors, after import euction, show ifferent pictures of economy for policymaking, especially in relation to investment in key sectors.

13 Fariza & Banouei, Iranian Journal of Economic Stuies, 6(2) 2017, Rank Table 9. comparison of key sectors in the omestic IO an SAM (base on average sectoral output multipliers) Key Sectors Ranking of Domestic Key Sectors Ranking of Domestic IO SAM Manufacture of basic metals Wholesale an retail trae an Manufacture of refine petroleum repair of motor vehicles an an other chemical proucts motorcycles Manufacture of other non-metallic Manufacture of foo proucts an mineral proucts beverages Manufacture of woo an paper Real estate activities proucts Banking an Insurance Electricity, Water an istribution - of Natural gas Transport, Postal an courier - activities 6. Conclusions Theoretically, the IOM provies the Leontief s prouction function, from which the sectoral output multipliers can be erive. In the SAM framework, the combine Leontief-Keynes moels ominate multipliers which are commonly known as accounting multiplier matrices. The inter-inustrial block of this matrix cannot be referre to as sectoral output multipliers as in IOM, rather they are accurately escribe as sectoral supply multipliers. Therefore, the two types of sectoral multipliers are of ifferent nature an cannot be compare for assessing sectoral performance an sectoral policy analysis of key sectors. Not only can the application of the conventional IOM an SAM approaches lea to an overestimation of sectoral output multipliers in the IOM an an unerestimation of sectoral supply multipliers in the SAM, but it can also provie ifferent pictures of economic sector performance. To solve the problem an make the sectoral multipliers of the two approaches comparable, euction of imports has been propose. The present stuy's results showe a significant overestimation of sectoral output multipliers for the Leontief eman-riven an Ghosh supplyriven approaches, an an unerestimation of sectoral supply multipliers for the SAM approach. Accoringly, application of sectoral output multipliers base on a omestic IOM an SAM can provie a clear picture of sectoral performance for etermining key economic sectors. Therefore, there searchers nee to consier these structural revisions; otherwise, they may unintentionally remove/a a key sector which shoul/shoul not be consiere as a key sector. The overall finings showe that, firstly, the key sectors were concentrate on inustrial sectors for IOM an on service sectors an agricultural sectors for the conventional SAM. Seconly, regaring the omestic IOM, although the

14 156 Fariza & Banouei, Iranian Journal of Economic Stuies, 6(2) 2017, normalize average of sectoral output multipliers were concentrate on inustrial sectors, some key sectors, such as manufacture of textiles an wearing apparel, were eliminate for the conventional IOM. Furthermore, in the omestic SAM, some sectors such as human health activities were eliminate from but some sectors such as electricity, water an istribution of natural gas were ae to the key sectors. The overall finings of the present stuy showe that the two approaches, after import euction, suggeste similar results, base on which policymakers can take an appropriate ecision on economic planning for the key sectors.

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16 158 Fariza & Banouei, Iranian Journal of Economic Stuies, 6(2) 2017, The Research Center of the Islamic Parliment. (2011). Input-output table of The Research Center of the Islamic Parliment.