Saaty's consistency analysis: An application to problems in static and dynamic input-output models

Saaty's priority analysis has given us a set of rules to assign weights (priorities) to a multiple of objects in a consistent way. The method has been shown to have great potential for economic application, especially in applied input-output work. In this paper we show that much stronger links exist between priority theory and input-output analysis than observed in the literature thus far. As we shall show, application of Saaty's instrumentarium to the Leontief framework opens the way for a new type of consistency analysis. In static models the dual output and price systems are shown to be consistent, in the sense that both can be described in terms of the same pairwise comparison matrix. In dynamic analysis, these dual systems are shown to be generally inconsistent, the only exception being the case of von Neumann growth.