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A study on the building of a new “output–output model” and its usefulness: based on a comparative analysis of the input–output model

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Abstract

This paper describes the building of a new open static “output–output” (O–O) model in comparison to the open static input–ouput (I–O) model developed by Leontief (Rev Econ Stat 18:105–125, 1936). While the I–O model can be characterized as a system that relates final demand to gross output, the O–O model relates gross output for final demand (endogenous or exogenous) to gross output for output (endogenous). We perform a comparative analysis between the two models in structure and characteristics and illustrate the usefulness of the O–O model, for example, by formulating I–O multipliers that can accept output as an initial change. The comprehensive analysis conducted in this paper, including a numerical illustration with an example, shows that the two models form a mutually supplementary relationship and could give rise to a fundamental framework for the analyses of various regional and national economic activities.

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Correspondence to Ho Un Gim.

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Gim, H.U., Kim, K. A study on the building of a new “output–output model” and its usefulness: based on a comparative analysis of the input–output model. Ann Reg Sci 43, 807–829 (2009). https://doi.org/10.1007/s00168-008-0227-x

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JEL Classification

  • C67
  • R15