Input-Output Multiplier Analysis

Input-output multiplier analysis converts the Leontief inverse into summary impact coefficients that answer how much total output, household income, or employment an economy generates per unit of final demand directed at a given sector. Building directly on Leontief's inter-industry accounting, it distinguishes the initial direct effect from the indirect supply-chain effect and, in the Type II form, the induced effect of household re-spending, yielding the multipliers that underpin most regional and project economic-impact studies.