Leontief Model-Based Research on the Input Structure of Three Industries: A Markowitz Optimization Perspective

Abstract

Abstract Economic growth necessitates not only the balance between aggregate supply and aggregate demand but also the structural equilibrium among various industries. This paper integrates the input-output table into the Leontief dynamic model, utilizing Markowitz’s theory to construct an investment portfolio of inputs and outputs. Further, it develops an input multiplier model for three distinct industries by amalgamating the Keynesian multiplier theory. It outlines a methodology to compute the influence and inductance coefficients of industrial interrelations. Employing the input-output table from HB province spanning 2010 to 2020, this study examines the input dynamics, investment multipliers, industrial structure, and inter-industry correlations. Over this period, the labor input structure of the primary industry witnessed a decline of 18.36%, while the investment multiplier for total output was augmented by 5.107 units for every unit increase in equipment manufacturing products. Between 2015 and 2020, the influence and inductance coefficients for the three industries rose by 11.21% and 4.45%, respectively, all constrained by the secondary industry. To stabilize the input structure across the three sectors and bolster sustained economic growth, it is imperative to liberate the relevant inputs of the secondary industry and enhance those of the primary and tertiary sectors.