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Prices and factor demand in an endogenized input-output model

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  • Kurt Kratena

Abstract

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.

Suggested Citation

  • Kurt Kratena, 2005. "Prices and factor demand in an endogenized input-output model," Economic Systems Research, Taylor & Francis Journals, vol. 17(1), pages 47-56.
    • Handle: RePEc:taf:ecsysr:v:17:y:2005:i:1:p:47-56
    DOI: 10.1080/09535310500034200
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    Cited by:

    1. Bastien Dufau, 2020. "The influence of a carbon tax on cost competitiveness," Working Papers 2005, Chaire Economie du climat.
    2. Dobrescu, Emilian, 2006. "Macromodel of the Romanian market economy (version 2005)," MPRA Paper 35749, University Library of Munich, Germany.
    3. Llop, Maria, 2020. "Energy import costs in a flexible input-output price model," Resource and Energy Economics, Elsevier, vol. 59(C).
    4. Dobrescu, Emilian, 2006. "Integration of macroeconomic behavioural relationships and the input-output block: Romanian modelling experience," MPRA Paper 35748, University Library of Munich, Germany.
    5. Saari, M. Yusof & Rahman, M. Affan Abdul & Hassan, Azman & Habibullah, Muzafar Shah, 2016. "Estimating the impact of minimum wages on poverty across ethnic groups in Malaysia," Economic Modelling, Elsevier, vol. 54(C), pages 490-502.
    6. Jeroen Klijs & Jack Peerlings & Wim Heijman, 2015. "Usefulness of Non-Linear Input—Output Models for Economic Impact Analyses in Tourism and Recreation," Tourism Economics, , vol. 21(5), pages 931-956, October.
    7. Saari, M. Yusof & Dietzenbacher, Erik & Los, Bart, 2016. "The impacts of petroleum price fluctuations on income distribution across ethnic groups in Malaysia," Ecological Economics, Elsevier, vol. 130(C), pages 25-36.
    8. Kurt Kratena & Gerold Zakarias, 2001. "MULTIMAC IV: A Disaggregated Econometric Model of the Austrian Economy," WIFO Working Papers 160, WIFO.

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