An Armington–Leontief model

Authors: Ferran Sancho

Journal of Economic Structures, Vol. 8, No 1, December, 2019

We develop a novel linear equilibrium model with an Armington flavor. We provide (1) proof of the solvability of the model and of the existence and non-negativity of the equilibrium solution and of the newly derived multiplier matrix; we also show (2) that the standard Leontief multiplier matrix arises as a special case of this new model and (3) that this model allows the computation of multiplier effects with no external output bias, which is particularly relevant for applied economic analysis. © 2019, The Author(s).