Leontief Input-Output Model

The Leontief Input-Output Model is an economic tool used to understand how different industries in an economy interact. It shows how the output of one industry depends on the inputs from other industries. For example, the automobile industry needs steel, labor, and parts from other sectors to produce cars. By mapping these relationships, the model helps economists predict how changes in one industry can affect others, allowing for better planning and policy-making. It's named after economist Wassily Leontief, who developed the model to analyze complex economic systems.