Iterative method for finding the balanced growth solution of the non-linear dynamic input–output model and the dynamic CGE model

Abstract

In this paper the linear Leontief dynamic input–output model is extended to the computable non-linear dynamic input–output model. This model can also be considered as a dynamic computable general equilibrium (CGE) model. The iterative method is given for calculating the growth rate, the profit rate, the prices of goods, and the level of production on the balanced growth path of this system. A six-sector computable non-linear dynamic input–output model is given as an applied example.