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Taxes and Subsidies in the Input-Output Model

Hiroshi Atsumi
The Quarterly Journal of Economics
Vol. 96, No. 1 (Feb., 1981), pp. 27-45
Published by: Oxford University Press
Stable URL: http://www.jstor.org/stable/2936139
Page Count: 19
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Taxes and Subsidies in the Input-Output Model
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Abstract

This paper reexamines Metzler's analysis of the effects of taxes and subsidies on the competitive supply prices of output in Leontief's system. It will be shown that Metzler's conclusions are valid even if one removes the assumptions made by Metzler, and that Allen's conclusion concerning the ad valorem tax is false. We present some interesting properties of Leontief's system, and also provide a theorem on Metzler's matrix, proving it and deriving some useful properties on the inverse matrix of the input-output model.

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