Demand-Driven and Supply-Sided Input–Output Models

Fidel Aroche Reyes and Marco Antonio Marquez Mendoza ()
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Marco Antonio Marquez Mendoza: Universidad Nacional Autónoma de México

Journal of Quantitative Economics, 2021, vol. 19, issue 2, No 4, 267 pages

Abstract: Abstract In the demand-driven open input–output model, output is determined by final demand, given the production technology in every industry. On the contrary, in the supply-sided version, value added determines the level of output and producers must induce sales in order to achieve a desired level of income. This latter version of the model has been criticised and even rejected on its implausibility, its difficult interpretation and its bizarre implications, among other aspects. This paper argues that the supply-side model is not logically, mathematically or otherwise at odds with Leontief’s arguments. Rejection of the model is a matter of theoretical reading.

Keywords: Input–output model; Demand-driven model; Supply-driven model; Leontief; Ghosh; Balanced growth (search for similar items in EconPapers)
JEL-codes: B23 C67 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s40953-020-00229-5

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