The Stability of Regional Input—Output Multipliers

Abstract

Changes in regional input—output structures are studied by analyzing the temporal stability of income and output multipliers derived from the Washington State input—output tables for 1963, 1967, and 1972. One conclusion is that for impact analysis, as it is most commonly practiced, the instability of multipliers over time appears to be a minor problem. This judgment is based upon a comparison of forecasting errors in impact studies due to temporal changes in multipliers with forecasting errors arising from other aspects of the impact estimating procedure. The implication is that regional analysts should reassess the commonly felt need to update tables on a regular basis.