## The Economics of Input-Output AnalysisInput-output analysis is the main tool of applied equilibrium analysis. This textbook provides a systematic survey of the most recent developments in input-output analysis and their applications, helping us to examine questions such as: Which industries are competitive? What are the multiplier effects of an investment program? How do environmental restrictions impact on prices? Linear programming and national accounting are introduced and used to resolve issues such as the choice of technique, the comparative advantage of a national economy, its efficiency and dynamic performance. Technological and environmental spillovers are analysed, both at the national level (between industries) and the international level (the measurement of globalisation effects). The book is self-contained, but assumes some familiarity with calculus, matrix algebra, and the microeconomic principle of optimizing behaviour. Exercises and review questions are included at the end of each chapter, and solutions at the end of the book. |

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### Contents

Introduction | 1 |

Inputoutput basics | 14 |

Multiplier effects | 25 |

Linear programming | 37 |

Are inputoutput coefficients fixed? | 54 |

The System of National Accounts | 65 |

The construction of technical coefficients | 87 |

From inputoutput coefficients to the CobbDouglas | 99 |

The diagnosis of inefficiency | 108 |

### Common terms and phrases

active sectors activity levels allocation autarky billion guilders binding constraints capital and labor chapter column vector commodity technology coefficients commodity vector competitive complementary slackness components consumption defined denoted determined domestic final demand dual constraint dual program economy efficiency change employment multipliers energy equal equation equilibrium example exports factor inputs feasible free trade frontier fulfills given Hence household industry inefficiency inequality input-output analysis input-output coefficients input-output model isoquant Lagrange multipliers lemma Leontief inverse linear program linearly independent macroeconomic marginal productivities material balance maximization measure national accounts net output non-negative non-substitution table objective function output phenomenon of complementary pollution positive primal production function production income multipliers production units productivity growth proof requirements row vector shadow prices Solow residual solution spillovers technical coefficients terms of trade TFP growth unit of commodity value-added coefficients value-added tax variables X-inefficiency yields zero