Product input matrix concept

The input-output matrix is ​​the result of a graphic representation of the relationship that exists between the VALUE and the demand in a certain sector during a specific period. Therefore, the concept of input product has to do with the set of goods and services that are used to define how the economic situation has been in said selected period. In this way, what this matrix provides us with is very useful information in relation to the balance that takes place between supply and use.

What is the input-output matrix used for?

The function of the input-output matrix is ​​to provide help in the decision-making of the company, why? Because this matrix is ​​useful to calculate the path followed by a good or service until it finally meets demand, thus facilitating economic development.

In addition, the importance of the input-product matrix lies in the knowledge that is had about each economic sector and its corresponding evolution, and therefore contribution to the National Productive System.

To better understand what the input-product matrix is, we must also take into account that it is what allows us to measure the Gross Domestic Product in our economy, trying to extract the volume of expenses as well as the approximate volume that is needed to invest. This is one of the main reasons why it is important to prepare the input-product matrix because this is what ultimately helps us understand how the consumer behaves over time and what the life of each product is like, since goes on the market or until it is withdrawn from it, going through the corresponding product evolutions as well as technological evolutions.

What data does the input output matrix need?

First of all, it is important to understand that inputs They derive from the productive sectors and it should always be indicated which are the primary inputs. Among the basic data for the graph of the input-product matrix we need to know what the Value Added and the Final Demand are.

Likewise, it is necessary to know the intermediate demand of each productive sector as well as the total gross value of production.

Leave a Comment