Input-Output Analysis

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.



comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious debt when government leaders use borrowed funds in ways that don't benefit or even oppress citizens. Some legal scholars argue that successor governments should not be held accountable for odious debt incurred by earlier regimes, but there is no consensus on how odious debt should actually be treated.
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the acquiring company will make an offer for the outstanding shares.
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by additional investment would not warrant the expense. A harvest strategy is employed when a line of business is considered to be a cash cow, meaning that the brand is mature and is unlikely to grow if more investment is added.
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will be executed at a specified price (or better) after a given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit order to buy (or sell) at the limit price or better.
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put another way, 80% of consequences stem from 20% of the causes.
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put another way, 80% of consequences stem from 20% of the causes.
Trading Center