Input-output impact analysis in current or constant prices: does it matter?

This paper addresses the question whether the results of input-output (IO) impact analyses differ (and to what extent) when a framework in current prices or in constant prices is used. We consider the effect of an exogenous stimulus of final demand in current prices on (a) gross output in constant prices, and (b) employment. In an empirical application to Denmark, we found that all predicted effects were very similar. This holds in particular for the results at the aggregate, economy-wide level and, to a lesser extent, at the sectoral level. <Emphasis Type="Bold">Mathematics Subject Classification (2000): C67, D57. Copyright Dietzenbacher and Temurshoev; licensee Springer 2012