WIOD WORLD INPUT-OUTPUT DATABASE construction and applications

1. This project is funded by the European Commission, Research Directorate General as part of the 7th Framework Programme, Theme 8: Socio-Economic Sciences and Humanities. Grant Agreement no: 225 281 WIODWORLD INPUT-OUTPUT DATABASE construction and applications Marcel Timmer Groningen Growth and Development Centre University of Groningen (presentation at World KLEMS conference, Harvard, 19-20 August, 2010)

2. WORLD KLEMS database Benefits of WORLD KLEMS database International comparisons of output, input and productivity growth at the industry level and when combined with relative prices across countries (PPPs) international comparisons of levels also possible. Although broad international guidelines (SNA, OECD manuals etc.) available, implementation conventions are needed, e.g. as in EU KLEMS project.

3. From WORLD KLEMS to WIOD WORLD KLEMS contains national databases and is limited: focus exclusively on the supply side without interaction between national economies New project started up to link national input-output tables with help of international trade data to capture international dependence through demand and trade: World input-output database (WIOD) project Funded by funded by the European Commission, Research Directorate General as part of the 7th Framework Programme, Theme 8: Socio-Economic Sciences and Humanities (4 million euro, 2010-2012)

4. Who is in WIOD? University of Groningen (The Netherlands) Institute for Prospective Technological Studies (Spain) Wiener Institut für Internationale Wirtschaftsvergleiche (Austria) Zentrum für Europäische Wirtschaftsforschung (Germany) Österreichisches Institut für Wirtschaftsforschung (Austria) Konstanz University of Applied Sciences (Germany) The Conference Board Europe (Belgium) CPB Netherlands Bureau for Economic Policy Analysis Institute of Communication and Computer Systems (Greece) Central Recherche SA (France) OECD (France)

5. This presentation To inform you about the World input-output database (WIOD) project and how it links with the World KLEMS initiative Aims of WIOD-project Brief outline of construction of the database Preliminary applications to consumption-accounting of green-house gas emissions and Factor-content of international trade

6. Documentation and info Dedicated website to WIOD project at www.wiod.org This presentation based on paper: World Input-Output Database (WIOD): Construction, Challenges and Applications Prepared by Abdul Azeez Erumban Reitze Gouma Bart Los Robert Stehrer Umed Temurshoev Marcel Timmer Gaaitzen de Vries

7. Aim of WIOD Time-series of input-output tables with supply broken down by origin: domestically produced or imported (by partner country) Satellite accounts: Socio-economic (labour and capital input by type) Environmental (energy, emissions to air and water, natural resources) Period from 1995 to 2006: 27 EU countries and 13 other major countries 35 industries and 59 products

8. List of Countries • EU-27 • plus13 non-EU: • - Canada - China • - United States - India • - Brazil - Japan • - Mexico - South Korea • - Turkey - Taiwan • - Russia - Indonesia • - Australia

9. WIOD characteristics • (Compared to other efforts such as GTAP, OECD, IDE etc.) • Time-series benchmarked on National Accounts data • Constant price tables • Explicit attention for (trade in) services • Supply and use tables as the basis • Satellite accounts (socio-economic and environmental) • Based on official statistics with maximum of transparency in calculations

10. National Input-Output (IO) Table (industry by industry type)

11. World input-output table (3 regions, industry-by-industry type)

12. Dataflows and construction steps in WIOT

13. Methodologies 1.Time-series of SUTs at purchasers’ prices Extrapolation and benchmarking of SUTs to National Accounts statistics, based on SUT-RAS method (Temurshoev and Timmer 2009) 2. From SUTs at purchasers’ prices to basic prices Construction of net tax, trade and transport margin matrices 3. From national to inter-country SUTs Breakdown of Use table into domestic and imported (by delivering country) Relying on imports from international trade statistics Not simple proportional method, but distinction between intermediate, consumer and capital goods. This is based on a new classification of HS6-digit products to end-use (In later stage use import tables from NSIs if available)

14. Methodologies 4. From SUTs to inter-country input-output table Technology assumptions (on product sales or production) Rest of World: exports to RoW is calculated as residual and can become negative 5.From current price to constant price tables National deflators based on industry gross output deflators, and row wise deflation of SUT. At later stage add in more information from national accounts International deflators (PPPs): World Bank ICP expenditure PPPs adjusted and allocated to industries (for 2005)

15. Possible applications Production and consumption of Greenhouse gas emissions Nakano et al. (2009, OECD), Davis and Caldena (2010, PNAS) Quarter of produced CO2 emissions is not ‘consumed’ in same place OECD net import is about 15-20% of own production, while China, Russia and Middle East are large net exporters Trade in value added Series of studies, mostly two regions (US and rest of world) Trade imbalance in value added terms much less than in gross terms Different angle on competitiveness and trade policy effects, and effects on wage inequality Almost all studies so far are lacking time-series perspectives, and breakdown of value added into labour skill types and capital

16. Approach, akin to Reimer (2006, JIE)

17. Greenhouse gas emissions (Preliminary results)

18. Greenhouse gas emissions (Preliminary results)

19. Factor content of trade (Preliminary results)

20. Global value chain of final output in Korean Elec. Equip. Manu, 1995, 2005 (Preliminary results)

21. Global value chain of final output in Korean Elec. Equip. Manu, 1995, 2005 (Preliminary results)

22. Value chain of final output in Global Elec. Equip. Manu., 1995, 2005 (Preliminary results)

23. Value chain of final output in Global Elec. Equip. Manu., 1995, 2005 (Preliminary results)

24. Concluding remarks Summary of methods and applications to be found in paper posted on the WORLDKLEMS website Main innovations in WIOD Time-series data Methodological improvements (e.g. SUT-RAS; import tables) Based on official data with transparent flow of adjustments Integrated socio-economic and environmental accounts Work in progress. Database will be made public Including basic data so user can make alternative choices parts of data public in autumn 2011; full data-set May 2012 Linking in the national KLEMS databases into WIOD will enhance potential area of applications

25. Additional material

26. Columns in Use table

27. Rows in Use table(part 1)

28. Rows in Use table(part 2)

29. WIOD project: Work Packages • WP1-3: Construction of harmonized supply and use tables, national input-output tables, price deflators, trade flows and intercountry input-output tables • WP4: Construction of environmental satellite accounts (energy use, greenhouse gas emissions, etc.) • WP5: Construction of socio-economic satellite accounts (skill levels, investment, accumulation of intangibles) • WP6: Methodological research • WP7-9: Development of new models and extension/adaptation of models with track record within EC