Hawkins–Simon condition

The Hawkins–Simon condition refers to a result in mathematical economics, attributed to David Hawkins and Herbert A. Simon,[1] that guarantees the existence of a non-negative output vector that solves the equilibrium relation in the input–output model where demand equals supply. More precisely, it states a condition for under which the input–output system

has a solution for any . Here is the identity matrix and is called the input–output matrix or Leontief matrix after Wassily Leontief, who empirically estimated it in the 1940s.[2] Together, they describe a system in which

where is the amount of the ith good used to produce one unit of the jth good, is the amount of the jth good produced, and is the amount of final demand for good i. Rearranged and written in vector notation, this gives the first equation.

Define , where is an matrix with .[3] Then the Hawkins–Simon theorem states that the following two conditions are equivalent

(i) There exists an such that .
(ii) All the successive leading principal minors of are positive, that is

For a proof, see Morishima (1964),[4] Nikaido (1968),[3] or Murata (1977).[5] Condition (ii) is known as Hawkins–Simon condition. This theorem was independently discovered by David Kotelyanskiĭ,[6] as it is referred to by Felix Gantmacher as Kotelyanskiĭ lemma.[7]

See also

References

  1. Hawkins, David; Simon, Herbert A. (1949). "Some Conditions of Macroeconomic Stability". Econometrica. 17 (3/4): 245–248. JSTOR 1905526.
  2. Leontief, Wassily (1986). Input-Output Economics (2nd ed.). New York: Oxford University Press. ISBN 0-19-503525-9.
  3. Nikaido, Hukukane (1968). Convex Structures and Economic Theory. Academic Press. pp. 90–92.
  4. Morishima, Michio (1964). Equilibrium, Stability, and Growth: A Multi-sectoral Analysis. London: Oxford University Press. pp. 15–17.
  5. Murata, Yasuo (1977). Mathematics for Stability and Optimization of Economic Systems. New York: Academic Press. pp. 52–53.
  6. Kotelyanskiĭ, D. M. (1952). "О некоторых свойствах матриц с положительными элементами" [On Some Properties of Matrices with Positive Elements] (PDF). Mat. Sb. N.S. 31 (3): 497–506.
  7. Gantmacher, Felix (1959). The Theory of Matrices. 2. New York: Chelsea. pp. 71–73.

Further reading

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