Input-output analysis is a macroeconomic analysis based on the interdependence between different sectors or branches of the economy.
Input-output analysis is used to assess the impact of positive or negative economic shocks and analyze economy-wide wave effects.
The use of input-output analysis is not common in the Western world or in neoclassical economics, but is often used in Marxist economics when central planning of the economy is required.
Input-output tables are the foundation of input-output analysis, displaying rows and columns of data that quantify the supply chain for all sectors of the economy.
Three types of impacts are modeled in input-output analysis. These are direct impact, indirect impact and induced impact.
These impacts on the economy are determined by changing certain levels of costs.