Difference between revisions of "Output Multiplier"
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== Formula == | == Formula == | ||
| − | If we represent the elements of the [Leontief Inverse Matrix]] <math>(I-A)^{-1}</math | + | If we represent the elements of the [Leontief Inverse Matrix]] <math>(I-A)^{-1}</math> as <math>{l_{ij}</math>, then the output multiplier is defined as: |
:<math> | :<math> | ||
Revision as of 12:33, 7 March 2022
Definition
An Output-to-Output Multiplier indicates how total production will change as final demand is changed in any one sector of the economy. The output multiplier for sector j is the sum of column j of the Technical Coefficients Matrix. This output multiplier measures the amount of output generated by a $1 change in final demand for the output of the jth sector.
Formula
If we represent the elements of the [Leontief Inverse Matrix]] 
as Failed to parse (syntax error): {l_{ij}
, then the output multiplier is defined as:
