How does the I-O Table Work?
An I-O table, or Input-Output table, measures the goods that a particular industry buys from all of the other industries (its “inputs”), also known as intermediate inputs. The I-O values include the goods purchased by the intermediate suppliers of the industry. The table can be read as inputs from (industry in row) purchased and converted to output by (industry in column). The values are proportions, so that for every $1 of output by the industry represented by column x, a certain number of cents worth of goods was purchased from each industry y, as given by the value in row y of column x. The I-O table calculates the additional output or jobs that would be created by increasing output for a particular industry; thus, it captures the indirect and induced effects of shocking a specific industry or group of industries.
