Decomposing Sources of Regional Growth with an Input-output Model: A Framework for Policy Analysis

Decomposition of an extended input-output model can provide insights into the relationship between a region's changing economic structure and its performance. Standard decomposition techniques are augmented and adapted to generate a conceptual framework for identifying potential sources of regional growth and subsequent impacts of alternative development strategies. The conceptual framework is a heuristic device that also can be used for applied policy analysis. As such, this paper provides a foundation for more elaborate empirical studies in the future.