Quotation Cahen-Fourot, Louison, Campiglio, Emanuele, Dawkins, Elena, Godin, Antoine, Kemp-Benedikt, Eric. 2019. Looking for the inverted pyramid: An application using input-output networks.




Herman Daly's view of the economy as an "inverted pyramid" sitting on top of essential raw material inputs is compelling, but not readily visible in monetary data, as the contribution of primary sectors to value added is typically low. This article argues that "forward linkages", a classical development theory concept capturing the relevance of a sector for downstream activities, is a more appropriate measure to identify key sectors. Using Input-Output (IO) data from eighteen European countries, we identify mining as the sector with the highest average forward linkages, and confirm the consistency of this result across countries via cluster analysis. By treating IO tables as the adjacency matrix of a directed network, we then build and visualise national inverted pyramid networks, and analyse their structure. Our approach highlights the key importance of natural resources in providing the necessary inputs to modern European economies.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title Looking for the inverted pyramid: An application using input-output networks
Year 2019
URL http://epub.wu.ac.at/6943/
JEL JEL C67; O10; Q32; Q57


Cahen-Fourot, Louison (Details)
Campiglio, Emanuele (Details)
Dawkins, Elena (Stockholm Environment Institute, Sweden)
Godin, Antoine (Agence française de développement, France)
Kemp-Benedikt, Eric (Stockholm Environment Institute, United States/USA)
Institute for Ecological Economics IN (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
1909 Resource economics, - management (Details)
2928 Environmental economics (Details)
2959 Sustainable development, sustainable economics (Details)
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