Method evidence record

Leontief Price Model

The Leontief price model is the cost-side dual of the quantity input-output system: instead of asking how much each sector must produce to meet final demand, it asks what unit price each sector must charge to cover its intermediate-input costs plus its primary-input (value-added) payments. Solving the dual equation p' = p'A + v' gives p' = v'(I − A)^{-1}, so the same Leontief inverse that propagates quantities also propagates costs, making the model the standard tool for tracing how a change in wages, taxes, or imported-input prices pushes through the entire price structure.

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Source record

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Leontief Cost-Push Price Model (Dual Input-Output Model)

Taxonomic method recordprocess-pipelineeconomics

  1. Miller, R. E., & Blair, P. D. (2009). Input-Output Analysis: Foundations and Extensions (2nd ed.). Cambridge University Press. · ISBN 9780521739023

Open full method2 recorded citations, copied from the method source record.

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Related methods

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