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In economics, an input–output model is a quantitative economic model that represents the interdependencies between different sectors of a national economy or different regional economies. [1] Wassily Leontief (1906–1999) is credited with developing this type of analysis and earned the Nobel Prize in Economics for his development of this model.
Wassily Wassilyevich Leontief (Russian: Васи́лий Васи́льевич Лео́нтьев; August 5, 1905 – February 5, 1999), was a Soviet-American economist known for his research on input–output analysis and how changes in one economic sector may affect other sectors.
The concept of productive matrix was developed by the economist Wassily Leontief (Nobel Prize in Economics in 1973) in order to model and analyze the relations between the different sectors of an economy. [1] The interdependency linkages between the latter can be examined by the input-output model with empirical data.
This formula is the core of environmentally extended input-output analysis: The final demand vector y can be split up into a domestic and a foreign (exports) component, which makes it possible to calculate the material inputs associated with each. The matrix F integrates material (factor) flow data into input-output analysis. It allows us to ...
Two input Leontief Production Function with isoquants. In economics, the Leontief production function or fixed proportions production function is a production function that implies the factors of production which will be used in fixed (technologically predetermined) proportions, as there is no substitutability between factors.
An economic model is a theoretical construct representing economic processes by a set of variables and a set of ... for example Leontief input–output models are of ...
Input-Output models, developed by Wassily Leontief, take advantage of linear programming and matrices by dividing the economy into interdependent sectors that produce products for both themselves and other sectors; the production in one sector relies in the input of goods from another. [14]
The theory is formulated both in one-sector, and, using the Wassily Leontief's input-output model, in multi-sector approximations. The data for the U.S. economy in the last century was used to justify the specification of the theory.