Supply-driven input-output multipliers

The paper raises and discusses issues related to the derivation, behaviour and characteristics of input-output multipliers where the exogenous changes are not assumed in elements of final demand but in total outputs of sectors and commodities. These multipliers are more appropriate for use in impact analysis of policies which influence farm outputs, than the traditional final demand multipliers. The paper estimates also such 'supply-driven' multipliers for 16 farm commodities of US agriculture. The empirical analysis shows that despite the variability in the multipliers' values, two rather solid groups of commodities which feel the strongest impacts of different crop and livestock output changes respectively, can be found. Several commodities are common to both groups, verifying also the significance of some indirect linkages between farm and non-farm commodities. However, the final demand sectors absorb the largest part of the initial exogenous change itself.