APPLICATION OF THE LEONTIEF MODEL IN SOLVING ECONOMIC PROBLEMS
Keywords:
balance equations, sector, matrix of technical coefficients, input–output analysis, Leontief inverse, productive matrix.Abstract
This paper considers the application of Wassily Leontief’s linear input–output model to the analysis and solution of practical economic problems, in particular the construction of inter-sectoral balance equations. The historical roots of the model, its mathematical formulation in terms of the matrix of technical coefficients, and the conditions under which the corresponding system of balance equations possesses a meaningful economic solution are discussed. A numerical example illustrating the computation of the total output vector for a three-sector economy is presented, together with a brief overview of the theoretical and applied directions in which the model continues to be developed.References
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