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Leontief Input-Output Model

Leontief Input-Output Model. Becky Siegel Carson Finkle April 23 2008. What is the model about?. Used to describe the relationship of industries within a sector International National Regional Within a business. Assumptions of the Model. Fixed proportions of inputs

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Leontief Input-Output Model

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  1. Leontief Input-Output Model Becky Siegel Carson Finkle April 23 2008

  2. What is the model about? Used to describe the relationship of industries within a sector • International • National • Regional • Within a business

  3. Assumptions of the Model • Fixed proportions of inputs • Demand is met fully without a surplus or shortage • Internally for closed model • Internally + external demand for open model

  4. The Equation (closed) • Let C be a consumption matrix such that and X be the production vector such that

  5. Closed Model Energy Manufact-uring Services

  6. The Equation (open) • Let C be a consumption matrix such that and X be the production vector such that

  7. Open Model External Demand Labor Transportation Food

  8. Solving for x vector

  9. Just for fun…

  10. Wrap Up • Contributions • Limitations • Conclusions

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