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Balanced Growth and Stability of the Leontief Dynamic Model: An Analysis of the Italian Economy

Author

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  • D Campisi
  • A Nastasi
  • A La Bella

    (Dipartimento di Ingegneria Industriale, Università degli Studi di Cassino, Via Zamosch 43, 03043 Cassino (FR), Italy)

Abstract

In the theory and practice of dynamic input-output modelling, the relative stability of the balanced-growth solution is a concept of particular interest. In fact, if the condition for the relative stability is satisfied, then the ratio between the balanced-growth output of each sector and the nonbalanced one converges to a positive constant as time passes, regardless of the initial sectoral distribution of production in the system. Thus, an economically meaningful trajectory is assured for any given starting point. This topic is properly discussed in the present paper, with the realistic case that the capital coefficient matrix is singular and each sector uses at least one capital good in its productive process being considered. Moreover, the stated results are applied to the Italian economy for 1985 by utilizing the intersectoral matrices calculated on the basis of the most recent input-output data.

Suggested Citation

  • D Campisi & A Nastasi & A La Bella, 1992. "Balanced Growth and Stability of the Leontief Dynamic Model: An Analysis of the Italian Economy," Environment and Planning A, , vol. 24(4), pages 591-600, April.
  • Handle: RePEc:sae:envira:v:24:y:1992:i:4:p:591-600
    DOI: 10.1068/a240591
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    References listed on IDEAS

    as
    1. Szyld, Daniel B, 1985. "Conditions for the Existence of a Balanced Growth Solution for the Leontief Dynamic Input-Output Model," Econometrica, Econometric Society, vol. 53(6), pages 1411-1419, November.
    2. Raymond W. Goldsmith, 1951. "A Perpetual Inventory of National Wealth," NBER Chapters, in: Studies in Income and Wealth, Volume 14, pages 5-73, National Bureau of Economic Research, Inc.
    3. Conference on Research in Income and Wealth, 1951. "Studies in Income and Wealth, Volume 14," NBER Books, National Bureau of Economic Research, Inc, number unkn51-2, January.
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    Cited by:

    1. Dobos, Imre, 2007. "Egy megjegyzés Bródy András: Leontief zárt dinamikus modellje című dolgozathoz [A note on András Bródys study entitled Leontiefs closed dynamic model"]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1004-1011.

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