Research Activities
Research Projects 2026
Cross-Entropy-Based Deflation of Input-Output Tables: A New Approach for Trade in Value-Added Analysis
Outline
This research develops a novel deflation method for international input-output tables and examines how deflation method differences affect GVC analysis results.
Double deflation has been widely used for deflating input-output tables, but requires detailed industry-level price indices and causes originally positive nominal value added to become negative in real terms. Timmer et al. (2021) proposed a GRAS-based method that still requires industry-level output deflators and real value-added from national accounts.
The method developed in this research combines the Leontief production model with the cross-entropy method to construct real input-output tables using only final demand category deflators. Real gross output is calculated endogenously from real final demand, and real intermediate inputs and real value-added are simultaneously estimated using prior year input and value-added coefficients. Constraining changes in input and value-added structure through information theory is expected to mitigate negative value-added occurrence.
Through comparison with WIOD 2013 and WIOD 2016 previous year price (PYP) tables, we clarify the frequency of negative value-added occurrences, the conditions for effective functioning, and the impact on GVC participation measurement.
Period
April 2026 - March 2028
Members
| Role | Member |
|---|---|
| [ Organizer ] | Uchida, Yoko |
| [ Co-researcher ] | Iwamoto, Tomohiro (Nagoya Gakuin University Associate Professor) |
| [ Co-researcher ] | Yosuke Noda(No affiliated institution) |
*Affiliations are as of April 2026.
Expected Outcome
- Peer-Reviewed Journal