© 2019, The Author(s). We develop a novel linear equilibrium model with an Armington flavor. We provide (1) proof of the solvability of the model and of the existence and non-negativity of the equilibrium solution and of the newly derived multiplier matrix; we also show (2) that the standard Leontief multiplier matrix arises as a special case of this new model and (3) that this model allows the computation of multiplier effects with no external output bias, which is particularly relevant for applied economic analysis.
|Journal||Journal of Economic Structures|
|Publication status||Published - 1 Dec 2019|
- Armington principle
- Extended linear equilibrium model
- Technological productivity