Interindustry analysis financial definition of interindustry analysis
input-output analysis (redirected from interindustry analysis)
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input-output analysis or
interindustry analysis the study and empirical measurement of the structural interrelationships between PRODUCTION sectors within an economy. The technique was devised by Wassily Leontief (1906-) to measure the factor input required by different industries to achieve a given OUTPUT. A particular sector of the economy requires inputs from other sectors, be it raw materials, intermediate goods and services, or labour, in order to produce output. The interdependence between industries, or sectors, is not linear but complex. That is, one sector does not produce, say, coal for other sectors independent of the requirements of the coal industry for inputs from other sectors. For the mining sector, coal is an output. But coal is an input for the electricity industry. By the same token, the coal industry requires inputs (including electricity) in order to produce the coal. The complexity of an economy can be gauged from this simple example. See VERTICAL INTEGRATION, INDICATIVE PLANNING, GENERAL EQUILIBRIUM ANALYSIS.