Abstract
The basic features of input-output production models are briefly reviewed. It is argued that some of the assumptions and the consequent mathematical setting underlying input-output models should be revised when (a) substitution effects prevail over growth-decline effects, (b) technological innovation is taken into account. In this light, the standard dynamic version of a Leontief model is criticized in order to arrive at a more general formulation of a production-innovation model. Some properties of this model are then illustrated and the economic meaning of the results is discussed. The main conclusion is that it is possible to establish a certain long-term invariance of the production vector in presence of uncertainties affecting technology, investment and consumption patterns.
Published Version
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