Equilibrium analysis of effects of a price change of an input factor in the context of input-output system.
Francisco, Clodualdo R.
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This paper is an attempt to model the effects of price change of a primary input factor into a segment of an economy. The primary input factor referred to is petroleum and the segment of the economy, the energy sectors. Labor is considered as another primary input factor. Market equilibrium is assumed to be stable and the disturbance caused by a price change in a primary input factor results in a new equilibrium state. Three approaches are made to define or specify this new state of equilibrium. Input-output economics is the primary basis of all the three approaches. Having analyzed and defined the new equilibrium states gave results that could serve as bases in making policy measures relative to the nature of the disturbance.
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