The Demand Driven and the Supply-Sided Input-Output Models. Notes for the debate

Fidel Aroche Reyes and Marco Antonio Marquez Mendoza

MPRA Paper from University Library of Munich, Germany

Abstract: The demand-driven version of the open Input-Output model determines production as a function of final demand, given the production technology. On the contrary, in the supply-sided version, value added determines 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 the bases of its implausibility, its difficult interpretation and its bizarre implications. This paper argues however that the logic of the supply-side model is not mathematically at odds with Leontief’s arguments. Rejection of the model is a matter of theoretical interpretation.

Keywords: Input-Output model; demand-driven model; supply-driven model; Leontief; Ghosh; balanced growth (search for similar items in EconPapers)
JEL-codes: B29 B41 C67 (search for similar items in EconPapers)
Date: 2013-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: The Demand Driven and the Supply-Sided Input-Output Models. Notes for the debate (2014)
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