1. Input and Output Analysis -The Leontief Models
... change because the industries' consumption levels are assumed to remain constant. These multiplications will take place over and over again until the industries find some level that balance the economy. Starting with a production level x the new production levels can be found like this: And, in general, and will eventually converge to a steady state vector. This vector will be a solution to . In ... the example that we have been using, repeated iterations will give the solution x So starting with any production vector will eventually lead to the equilibrium production level ...
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