Prices and factor demand in an endogenized input-output model
This paper combines factor demand functions (for intermediate input and labour) and price equations (derived from a Generalized Leontief cost function) with the traditional input-output price model. The cost functions determine factor demands for materials and labour as well as output prices at given input prices. At the second level of aggregation, the intermediate demand as a single input is split proportional to the elements in the column of the technical coefficients matrix. The emphasis in this endogenization of technical coefficients is on two features. First, the repercussion of output on input prices, and, second, the link between the econometric model for the supply side and the input-output demand model.
Volume (Year): 17 (2005)
Issue (Month): 1 ()
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- Klaus Conrad & Tobias Schmidt, 1998. "Economic Effects of an Uncoordinated Versus a Coordinated Carbon Dioxide Policy in the European Union: An Applied General Equilibrium Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 10(2), pages 161-182.
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- Truchon, Michel, 1984. "Using Exogenous Elasticities to Induce Factor Substitution in Input-Output Price Models," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 329-34, May.
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