Input-Output Analysis

Input-output analysis (I-O analysis) is a macroeconomic model that shows the inter-industry relationships in an economy. It is a statistical tool that helps to understand how the production of one industry affects the production of other industries.

I-O analysis is based on the idea that the economy is a system of interdependent industries. Each industry produces goods and services that are used by other industries. For example, the agricultural industry produces food, which is used by the food processing industry. The food processing industry produces processed food, which is used by the retail industry. The retail industry sells food to consumers.

I-O analysis can be used to track the flow of goods and services through the economy. It can also be used to estimate the impact of changes in one industry on other industries. For example, if the agricultural industry experiences a decline in production, it will affect the food processing industry, which will in turn affect the retail industry.

I-O analysis is a valuable tool for understanding the structure of the economy and the impact of changes in one industry on other industries. It can be used to develop policies to promote economic growth and stability.

Here are some of the key features of I-O analysis:

• It is a macroeconomic model that shows the inter-industry relationships in an economy.
• It is a statistical tool that helps to understand how the production of one industry affects the production of other industries.
• It is based on the idea that the economy is a system of interdependent industries.
• It can be used to track the flow of goods and services through the economy.
• It can be used to estimate the impact of changes in one industry on other industries.
• It is a valuable tool for understanding the structure of the economy and the impact of changes in one industry on other industries.
• It can be used to develop policies to promote economic growth and stability.