An extended variant of the IO model for the study on indirect and direct taxes

Abstract

Since the input - output (I.O) system was created by W. Leontief, there have been many models expanding from the I.O model such as inter-regional I.O model, inter-national I.O model, social accounting matrix (SAM), demographic - economic model... The I.O model describes and analyzes the flow of products through inter-industrial relationships or the initial distribution process of the economy. The inter-regional I.O model not only reflects inter-industry relationships but also reflects inter-regional relationships, it allows determining the advantage of one region over another in which industries? The social accounting matrix and economic demographic model not only model describes the initial distribution process but also describes the redistribution process. This study extends the I.O model with a harmonious blend of the concept of social accounting matrix and economic demographic model to see that the economy is like a cycle of reincarnation in Buddhism about "no beginning and no end"; any change (Cause) at any stage directly or indirectly affects (Consequences) on the rest.