Using Input-Output Analysis to Measure U.S. Economic Structural Change Over a 24 Year Period

Many studies have been prepared on structural change in the U.S. economy using input-output analysis. These include, among others, Carter’s examination of U.S. economic technological change over the 1939-1963 period and, more recently, Sonis’ new decomposition approaches to visually display structural change with application to U.S. input-output tables from 1947-1977./1/ This paper, using Sonis’ techniques of displaying structural change, evaluates changes in the U.S. economy over the 1972 to 1996 period, focusing on interindustry linkages and the effect of international trade on those linkages. The study shows that the relative impact of manufacturing on the economy has declined in the United States from 1972 to 1996 and that import penetration has been a major factor in this decline. The graphical presentation of interindustry relationships through the “Multiplier Product Matrix” (MPM) and its associated “economic landscape” provides a visualization of the U.S. economic structure for selected years and how it has changed over time.