Structural analysis of the economy of Puerto Rico after the elimination of Section 936: A network-based approach
Keywords:
Input Output, Mathematical, Industrial PolicyAbstract
This paper studies the productive structure of Puerto Rico after the elimination of Section 936 of the US Internal Revenue Code. To examine the productive structure, inputoutput (I-O) and network analysis techniques were used, as well as the 2007 and 2012 I-O matrices for Puerto Rico. It was possible to illustrate the significant relations in the structure. Through Density, it was found that transactions experienced a minimal increase. In addition, it was found that manufacturing had a significant Outdegree measure but minimal Indegree and PageRank measures. Besides, it was found that the new construction, municipal government, arts, and sports spectator’s sectors had high PageRank measures. It is recommended that an import substitution policy be established in the industries that make up the manufacturing sector. Diversifying the core components of the productive structure is also recommended.
JEL Classification: R150, C020, L520.
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