Wassily w leontief introduced inputoutput analysis technique in 1951. By input output analysis i mean the latter two of these three types of input output work, and it is to them that this paper is devoted. From an inputoutput table to a general equilibrium model. Better yet, such models can be used to estimate economic multipliers for specific industries. This analysis is intended to document a dataset and core model. Thijs ten raa, author of the acclaimed text the economics of inputoutput analysis, now takes the reader to the forefront of the field. These are characterized as 1 the conceptualization of inputoutput within the traditions of econometric analysis. This article examines inputoutput modeling in more detail to provide a general description of economic impact concepts, to provide an example of an economic impact model. Each row is in fact a linear equation with as many variables and coefficients as there are sectors rose and miernyk6 i. The strategy distinguishes inputmodel and intrinsic simulation uncertainty components of the output, a shortcoming of prior bootstrap methods, and models nonhomogeneous and nonnormal effects of inputmodel uncertainty, a limitation of bayesian methods. Leontief model wassily leontief won the nobel prize in economics in 1973. This appendix discusses the history and application of inputoutput analysis and details the inputoutput model, called the recon io model, developed by rutgers university. Bard june 20, 2014 1 leontief inputoutput analysis in this brief document well explore a bit. A main use of inputoutput analysis is to measure the economic impacts of.
Document resume ed 093 434 the 11w model for input. Leontief later won the nobel prize in 1973, largely related to this work. The inputs represent the flow of data and materials into the process from the outside. The model is sometimes configured to include any storage that might happen in the process as well. The inputoutput model can be formulated so that it can be used as an analytical tool allowing estimation of ripple effects on the state economy as a result of these interdependencies. A transaction table is the heart of inputoutput analysis.
Experts will realize how much more there is to learn and be directed, via ample references, to journal articles and advanced books. W 644 a primer in economic multipliers and impact analysis. Wassily leontief 19061999 is credited with developing this type of analysis and earned the nobel prize in economics for his development of this model. This method is commonly used for estimating the impacts of. It is a way to represent the production in an economy it assumes.
The preservation economic impact model peim is based on the recon io model. Input output analysis at the regional level 6 abstract. The leontief open production model or inputoutput analysis iris jensen december 15, 2001 abstract wassily leontief won a nobel prize in economics in 1973 for him explanation of the economy using his inputoutput model. Inputoutput analysis at the regional level 6 abstract. Inputoutput analysis is of special interest to the nationalincome economist because it provides a very detailed breakdown of the macroaggregates and money flows. Inputoutput analysis is both text book and indispensable reference work.
Input output models are designed to examine all of. Overview of inputoutput analysis the foundation of modern inputoutput analysis is based on work started in the 1930s by wassily leontief. The inputoutput ipo model is a functional graph that identifies the inputs, outputs, and required processing tasks required to transform inputs into outputs. Regional inputoutput modeling system rims ii users. Input output analysis, model reduction and control of the. Inputoutput is a novel technique invented by professor wassily w. Reasons for popularity over the past several decades the basic static inputoutput model has been used extensively in empirical economic. The following sections of this paper describe extensions to that model and the kinds of questions the extended models have been designed to answer. The main applications of inputoutput analysis have been discussed in leontief 1984, miller and blair 1985, fleissner 1993, holub and schnabl 1994.
The leontief inputoutput model university of michigan. Beginners will start with the fundamentals of the model, including theory, algebra, and data issues. Pdf a pretopological analysis of the inputoutput model. This volume collects and unifies his and his coauthors research papers on national accounting, inputoutput coefficients, economic theory, dynamic models. He has over 20 years of experience and a significant publications record in regional economic impact modeling and analysis. An algebrabased approach to leontief inputoutput analysis gregory v. The basic leontief3 inputoutput model is expressed as a series of accounting identities. It is understood that this analysis will ultimately provide a point of departure for subsequent assessments of tax policy options based on more complex formulations. Inputoutput analysis, model reduction and control of the. An algebrabased approach to leontief inputoutput analysis. Output analysis focuses on the analysis of simulation results output statistics. One of the most interesting developments in the field of modern economics is the model of industrial interdependence known as inputoutput tableau. The irc model for inputoutput analysis of student personnel services was designed to assess the importance of objectives, how they are achieved, to what extent they are achieved, and how much it costs per objective per student in any given year.
Inputoutput model the inputoutput table is basically an accounting system a double entry one similar to that prepared for a business in which sales and purchases or assets and liabilities will be shown but, in this case, for an economy. Two spreadsheets are provided that assist users in conducting economic impact analysis with this model one for simple analysis and another for complex analysis. Leontief developed an inputoutput method for estimating economic impacts and tracing the flows of dollars. Leontief, in which the interdependence of an economys various productive sectors is observed by viewing the product of each industry both as a. Pdf methodology of the inputoutput analysis michael. Aim is to model the localregional economy showing the inputoutput linkages that occur between different sectors and the household sector.
Output analysis for simulation models introduction output analysis is the modeling stage concerned with designing replications, computing statistics from them and presenting them in textual or graphical format. The data required is the inputoutput accounts for the region often referred to as the transactions matrix. Inputoutput analysis 1 many different industriessectors. Input output analysis is the study of quantitative relations between the output levels of the various sectors of an economy, a practical tool for national accounting and planning.
It is used to analyse interindustry relationship in order to understand the interdependencies and complexities of the economy and thus the conditions for maintaining equilibrium between supply and demand. The input output tables provide a detailed analysis of the production process and the use of goods and services produced in a country or imported from the rest of the world, and also, of the income generated by the various sectors economic in that production. Inputoutput expands heavily upon the economic base model of the economy. Its framework rests on leontiefs basic assumption of constancy of input coefficient of production which was split up above as constant returns of scale and technique of production. The irc model was developed through a 197173 statewide. Inputoutput analysis io is a form of macroeconomic analysis based on the interdependencies between economic sectors or industries. Use the inputoutput approach developed by leontieff in 1930s. The leontief open production model or inputoutput analysis. The basic leontief3 input output model is expressed as a series of accounting identities. A transaction table is the heart of input output analysis. In economics, an inputoutput model is a quantitative economic model that represents the interdependencies between different sectors of a national economy or different regional economies.
Economic, environmental and distributive analysis of the. Hypothetical figures approach i 21 impacts on industry outputs 21 other impacts 24 2. It is expected that there will be more and more researcher joining this environment, allowing for greater use and access to the io analysis. Input means that objects or a material, which is demanded by the entrepreneur or producer for the purpose of production and output, is the result or outcome of the productive effort. The regional inputoutput modeling system rims ii users guide provides practical advice on the appropriate use of the rims ii model as well as an explanation of the inputoutput framework and rims ii model assumptions. Pyio is a module for inputoutput analysis, written in python, a generalpurpose open source computer programming language. Major limitations faced by inputoutput analysis are as follows. Input output analysis input output analysis is a method of calculating income and employment multipliers which takes account of differences in technology between industries and of the linkages between industries. Inputoutput analysis, economic analysis developed by the 20thcentury russianborn u.
The leontief model is a model for the economics of a whole country or region. The demand vector d2rn is the vector whose ith component is the value in dollars, say of production of sector idemanded. The next step is to prepare an economic model so that we can trace the impact of changes in one sector. This article examines input output modeling in more detail to provide a general description of economic impact concepts, to provide an example of an economic impact model and to discuss some of the limits of these types of models. Pdf inputoutput analysis is the main tool of applied equilibrium analysis. What is the inputoutput model input output model examples. In the model there are n industries producing n di erent products such that the input equals the output or, in other words, consumption equals production. These are characterized as 1 the conceptualization of input output within the traditions of econometric analysis.
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