Sanyal and Jones on trade in middle products

This paper reports, for the first time, empirical estimates of one of the most ingenious models of trade in intermediate products - the model of Sanyal and Jones. We show how the restrictions implied by the Sanyal and Jones production structure can be imposed and tested with the help of aggregate data even though information about the allocation of inputs and outputs between tiers and industries is not available. A new theoretical concept, that of 'disjoint production' is introduced. We also propose a new functional form that is a generalization of the Symmetric Normalized Quadratic restricted profit function.