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In economics, an input–output model is a quantitative economic model that represents the interdependencies between different sectors of a national economy or different regional economies. [1] Wassily Leontief (1906–1999) is credited with developing this type of analysis and earned the Nobel Prize in Economics for his development of this model.
Output is the result of an economic process that has used inputs to produce a product or service that is available for sale or use somewhere else.. Net output, sometimes called netput is a quantity, in the context of production, that is positive if the quantity is output by the production process and negative if it is an input to the production process.
Marx argues that a rising organic composition of capital is a necessary effect of capital accumulation and competition in the sphere of production, at least in the long term. This means that the share of constant capital in the total capital outlay increases, and that labor input per product unit declines.
It distinguishes inputs from the point of view of their user (the capitalist), in terms of the degree of flexibility that the user has in using them. On the other hand, constant capital refers to the non-human inputs into production, while variable capital refers to the human input (the hiring of labor power to do labor).
Wire-grid Cobb–Douglas production surface with isoquants A two-input Cobb–Douglas production function with isoquants. In economics and econometrics, the Cobb–Douglas production function is a particular functional form of the production function, widely used to represent the technological relationship between the amounts of two or more inputs (particularly physical capital and labor) and ...
The area of economics that focuses on production is called production theory, and it is closely related to the consumption (or consumer) theory of economics. [ 2 ] The production process and output directly result from productively utilising the original inputs (or factors of production ). [ 3 ]
However, Solow's calculations have been proven invalid, so this is a poor explanation. Modern research shows the main factor for economic growth is the growth of labor and capital inputs, not increases in productivity. [citation needed] Therefore, other factors besides capital accumulation must have been big contributors to the Soviet economic ...
In economics, the theory of imputation, first expounded by Carl Menger, maintains that factor prices are determined by output prices [6] (i.e. the value of factors of production is the individual contribution of each in the final product, but its value is the value of the last contributed to the final product (the marginal utility before reaching the point Pareto optimal).