An Input-Output Analysis of Danish Trade and Specialization 1966–1983

The paper develops a method for measuring the gain or loss to the economy as a whole of changes in specialization. Such changes are in turn due partly to changes in market shares on the domestic market and partly to changes in the composition of exports. By applying domestic market shares and the composition of exports of year t-i to the I-O coefficients of year t it is possible to isolate the effect of changes in specialization from those of production technology reflected in the I-O coefficients. The method is applied to the time series of Danish input-output tables for the period 1966–1983. In addition the paper sets up an optimization model for the industrial structure of a small open economy under perfect competition and applies the model to the Danish I-O table for 1983.