Input-Output Analysis

AAA

DEFINITION of 'Input-Output Analysis'

Input-output analysis is an economics term that refers to the study of the effects that different sectors have on the economy as a whole, for a particular nation or region. This type of economic analysis was originally developed by Wassily Leontief (1905 – 1999), who later won the Nobel Memorial Prize in Economic Sciences for his work on this model. Input-output analysis allows the various relationships within an economic system to be analyzed as a whole, rather than individual components.

INVESTOPEDIA EXPLAINS 'Input-Output Analysis'

Input-output analysis seeks to explain how one industry sector affects others in the same nation or region. The analysis illustrates that the output of one sector can in turn become an input for another sector, which results in an interlinked economic system. The analysis is represented as a matrix, where different rows and columns are filled with values representing the inputs and outputs of various sectors.

RELATED TERMS
  1. Mathematical Economics

    Mathematical economics is a discipline of economics that utilizes ...
  2. Wassily Leontief

    A Nobel Prize-winning American economist and professor. Wassily ...
  3. Rational Behavior

    A decision-making process that is based on making choices that ...
  4. Behavioral Finance

    A field of finance that proposes psychology-based theories to ...
  5. Economics

    A social science that studies how individuals, governments, firms ...
  6. Free Market

    A market economy based on supply and demand with little or no ...
Related Articles
  1. Fundamental Analysis

    How Influential Economists Changed Our History

    Find out how these five groundbreaking thinkers laid our financial foundations.
  2. Options & Futures

    Nobel Winners Are Economic Prizes

    Before you try to profit from their theories, you should learn about the creators themselves.
  3. Economics

    A Practical Look At Microeconomics

    Learn how individual decision-making turns the gears of our economy.
  4. Economics

    Why Can't Economists Agree?

    There are many reasons why economists can be given the same data and come up with entirely different conclusions.
  5. Personal Finance

    Microeconomics

    This tutorial teaches the basics of one of the most important economic topics. A must for all investors.
  6. Personal Finance

    What Drives Consumer Demand for Tesla?

    Tesla did not invent the electric vehicle market, but it has brought to it elements of luxury and elite status. But what really drives demand for Teslas?
  7. Economics

    How A Limited Government Affects A Country's Finances

    Countries with limited governments have fewer laws about what individuals and businesses can and can’t do. What's the net result?
  8. Investing Basics

    How Does Goodwill Affect Financial Statements?

    Goodwill is a bit of a paradox--intangible, yet it is recorded as an asset on the purchasing company's balance sheet.
  9. Investing Basics

    Using Normal Distribution Formula To Optimize Your Portfolio

    Normal or bell curve distribution can be used in portfolio theory to help portfolio managers maximize return and minimize risk.
  10. Investing Basics

    R-Squared

    Learn more about this statistical measurement used to represent movement between a security and its benchmark.

You May Also Like

Hot Definitions
  1. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  2. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  5. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  6. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
Trading Center