- Elgar original reference
Edited by Jeroen C.J.M. van den Bergh
68 Input-output analysis, technology and the environment Faye Duchin and Albert E. Steenge 1. Introduction Input-output (1-0)analysis provides a theoretical framework for specific questions about the relationship between economic structure and economic action. Economic structure is defined in terms of industries or sectors (these terms will be used interchangeably) that deliver goods to each other and to final consumers. Each industry’s production process is described in terms of the average technology being used in that particular industry. Technologies can be accounted for at different levels of detail, varying between a highly aggregated classification, such as one distinguishing between agriculture, heavy and light industry and services, to a very disaggregated one, at the limit in terms of individual enterprises. Economic action can be described in terms of specified consumption and production activities, involving households, capital formation, government activities, or trade that crosses the borders of the economy in question. The detailed way in which 1 0economics is able to examine economic activities opens the way for studies that deal not only with industrial production - the focus established with the earliest 10 studies - but increasingly with other aspects of human activities as well, such as the effects of production and consumption on the physical environment. The basic theoretical framework of 1-0 economics was developed by Wassily Leontief in the 1930s. He soon used it for the first empirical implementation of a special sort of empirical general equilibrium model of the US economy (Leontief, 1936). A central place is taken...
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