6533b838fe1ef96bd12a39f9
RESEARCH PRODUCT
On the Conditions of Price Consistency in the Input-Output Model
Louis De Mesnardsubject
Computable general equilibriumInput/outputMatrix (mathematics)Basis (linear algebra)Input–output modelConsistency (statistics)EconometricsEconomicsProduction (economics)Mathematical economicsVertical integrationdescription
The input-ouput model remains the basis of most SAM or CGE models. It actually uses two periods: the prices indexes solve it with the current period coefficients; the corresponding physical model is monoperiodic: the current prices solve it with the base period coefficients. The Leontief model is not consistent --- both models diverge generally --- unless the interindustry matrix of direct and indirect quantities of labor is stable over time. This implies that the vertically integrated labor coefficients are stable. This assumption is satisfied when the physical production coefficients and the physical labor coefficients are stable over time, two very strong assumptions.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2013-01-01 | SSRN Electronic Journal |