Abstract:

The article illustrates an application of the input-output model to the analysis of the production structure of Peru and the estimation of sector multipliers for the Peruvian economy for 2007. The multipliers allow a better knowledge of the relative importance of all economic sectors and provide a better approximation and description of the characteristics of the productive structure of the country. A result of the analysis is that the multipliers of the service sectors are higher than the multipliers of industrial products, and the basic products (agriculture, fishing, and mining) have intermediate-level multipliers. Also, the multipliers from the 2007 input-output table are significatively lower than the sector multipliers from the 1994 table. Explaining the decreasing value of multipliers overtime involves considering the greater openness of the Peruvian economy in 2007. Nowadays, an enterprise may import any input from abroad, easily and with no tariffs. Therefore, the backward linkages with the domestic economy have been diminished thus reducing the intersectoral relationships and the multipliers. Comparison with other countries’ multipliers shows that the same situation is observed for Colombia and Chile, as a result of globalization.