Analyzing The Industrial Structure In Hunan Province Based On Dynamic Input-output Model

Recently, due to the influence of the financial crisis and Europe’s debtcrisis, lots of countries and regions in the world devote their great efforts toadjusting the industrial structure in order to reverse the declining trend ofeconomic slowdown. Therefore, adjusting the industrial structure becomes avery popular topic in economic research. Based on the d ynamic Input-Outputmodel, this paper has finished the following work:First, it has been found that the three industries structure of Hunanprovince is not reasonable b y anal yzing the statistical yearbooks. Besides, basedon the input-output data of Hunan province in2007, the influence coefficientsand induction coefficients have been calculated. These coefficents were furtherused to evaluate the industrial relationship degree.Second, a new non-homogeneous differential dynamic Input-Output modelis proposed based on a variable structure dynamic Input-Output model. Thereare totall y two steps in solving this new model. One is to obtain thefundamental solution matrix corresponding to the homogeneous differentialequation. Since the coefficient matrix of the new model has particular meaningin economic, the fundamental solution matrix presents certain law. The other isto obtain the general solution of the new model by integrating. This generalsolution aways can be solved b y the numerical methods. The following are threeadvantages of this proposed model: a) shortcomings of the variable structuredynamic input-output model which requires the rolling forecast were overcomed;b) industrial output value can be predict as soon as the economic parameters ata time is known; c) whether the current economic policies are beneficial to thefuture economic development can also be assessed, which provided quantitativeanalysis foundation for the reasonable industrial structure policy.At last, using the Hunan province as an example, an empirical anal ysis hasbeen made based on the proposed model. Seventeen sectors output value of eachyear was forecasted and were compared with the actual industrial production.The results show that analysis is feasible in the range of allowed error.