RSC and industry change scenario

I have found a few related posts but want to make sure that I understand RSC/RPC in the context of an industry change scenario. I am looking at an industry change scenario where there is increased output in an intermediate industry. I know that this additional production is all used as an input into another industry in the region. Using the production coefficient I can translate the increased production in the intermediate industry into a value of output in the processing industry. What would I need to do with RSC/RPCs to ensure that the change in output in the processing industry reflects the fact that the additional demand for the intermediate industry is all coming from within the region?
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  • The simplest way will be to go to Customize > Trade Flows > Industry/Institution RPC tab, then select the intermediate commodity from the drop-down menu at the top. The table directly below will then show you all the industries that purchase that commodity. Scroll down to your processing industry and set it's RPC to 1.00. This will ensure that the processing industry purchases all of that commodity locally. Note, however, that if more than one industry or institution produces that intermediate commodity, then even if the processing sector buys the commodity locally, it won't buy it all from that one intermediate sector, but from a combination of all the local producers of that commodity, based on the market shares matrix. You can check for other producers of the commodity by going to Explore > Social Accounts > Balance Sheets tab, then selecing View By: Commodity, then selecting the commodity from the drop-down menu. If there are other producers, then a. If the other producers are all industries (i.e., no institutional production) then you can edit it so that the other producer doesn't produce that commodity: go to Customize > Commodity Production and scroll down to the other producing industry and zero-out its coefficient for the commodity in question and place a checkmark in the Fixed bos, then click Save. b. If one of the other producers is an institution, there is no way to edit that institution's production of the commodity. In that case you will need to approach your analysis differently, running it as two separate impacts: 1. Edit the processing sector so that its RPC for the commodity is 0. Then, run the Industry Change impact using your estimate of its increased Output. 2. Impact the intermediate sector by the amount its output will increase. 3. The direct effects from 1 are your true direct effects. Add the direct and indirect effects from 2 to the indirect effects in 1 to get your true indirect effects. Add the induced effects from 2 to the induced effects in 1 to get your true induced effects.

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