Analytical and Empirical Comparison of Policy-Relevant Key Sector Measures

We consider ten widely used key sector measures (linkages) and identify groups of the most similar indicators on both analytical and empirical grounds. We derive new closed-form formulas for the generalized complete and incomplete hypothetical extraction linkages and add the up till now undefined forward counterpart of the net backward linkage. The analytical relations and some stylized facts enable us to formulate hypotheses about the direction and strength of the relationships between various linkages. To study policyrelevant measures, our empirical tests are based on sectoral income (GDP) linkages, CO2-emission linkages and employment linkages for 34 industries and 33 countries. They show that the information on the ten key sector measures may be summarized by four measures.