Fixed capital in linkage-based planning models

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Abstract
The argument of this paper is that linkage indexes must be treated dynamically in order to be useful to investment planning.The static straitjacket afforded by input-output tables means that linkage indexes need to be supplemented by other sources of information. This paper makes four comments on the dynamic interpretation of linkages. In the first section it is shown that, considered statically, sectoral interdependence and growth are inversely related. In the second section it is argued that linkage-based planning need not necessarily conflict with the principle of comparative advantage. In the third section the correct use of imports in the construction of ex ante linkage indexes is defined. In the fourth section we show how linkage indexes derived from the output approach can be extended to incorporate fixed capital. Finally, some calculated indexes for South Korea are presented and briefly discussed.