MRIO

MRIO stands for multi-regional input-output analysis, a framework that extends traditional input-output analysis to capture economic transactions across multiple geographic regions and sectors. By connecting regional production structures through inter-regional trade, MRIO models map how final demand in one region generates output, jobs, and emissions in many regions around the world.

In an MRIO model, the economy is represented by a region-by-region, sector-by-sector matrix of input requirements (the technical coefficient matrix, A). A corresponding final demand vector (y) indicates consumption, investment, government spending, and exports by region and sector. The Leontief inverse (I − A)⁻¹ yields total (direct and indirect) input requirements per unit of final demand. Multiplying (I − A)⁻¹ by y provides total outputs by region and sector, and, with appropriate aggregation, regional totals or countrywide totals can be produced.

Environmental and other extensions attach intensities (emissions, energy use, water use, resource consumption) to each region-sector cell. By applying these intensities to the MRIO-based production, one can estimate embodied environmental flows embedded in final demand, import/export trade, and cross-border supply chains. This enables analysis of a region’s or nation’s carbon footprint, energy demand, or material footprint arising from consumption and trade.

Applications include tracing embodied emissions across global value chains, assessing trade dependencies and resource use, informing environmental policy and market regulations, and evaluating scenarios such as commodity shifts, tariff changes, or efficiency improvements. Data for MRIO come from harmonized regional IO tables, trade data, and energy/emissions statistics, but construction requires careful alignment of regions, sectors, and time periods. Notable MRIO datasets include EORA, EXIOBASE, Open IO, and OECD inter-country IO tables.