Autarky vs globalization: a measure of loss profitability of the national industry

Abstract

In this work it is argued that the difference between the multipliers of the Inverse Leontief Matrix calculated with the Total Input-Output Matrix MIP-T, and the multipliers obtained from the Internal (National) MIP, constitute a measure of the loss of profitability of the national produc­tive apparatus, which we call the National Multiplier Decrease Measure (MDMN). We propose an econometric model to estimate the elasticity of said difference with respect to the import of inputs. The estimation of the model confirms a significant and high relationship between the two variables, this result is reinforced by calculating the elas-ticity of inter­nal multipliers with respect to the import of inputs. The elasticities are used to analyze the decrease in the internal multiplier effect, generated by the import of inputs. The economic policy implications are of significant importance, mainly with respect to the measures taken for the alleged gains that the complete liberalization of international trade brings with it according to its promoters.