Price consistency in the Leontief model

La cohérence des prix dans le modèle de Leontief

Louis de Mesnard

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Abstract: The Leontief model actually uses two periods, base and current periods. The model is solved with current price indexes and the base technical coefficients. The corresponding physical model is monoperiodic: it is solved with the current prices and the current coefficients. The Leontief model is not coherent—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.

Keywords: production price; Leontief; input-output; price; CGE; SAM; labor coefficients (search for similar items in EconPapers)
Date: 2016-12
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Citations: View citations in EconPapers (2)

Published in Cahiers d'Economie Politique = Papers in political economy, 2016, 2 (71), pp.181-201. ⟨10.3917/cep.071.0181⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01338092

DOI: 10.3917/cep.071.0181

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