Seton’s Eigenprices: Comparisons between Post-War Holland and Hungary

Concise methods for the numerical implementation of general equilibrium models for technologically advanced countries were developed during the nineteen- thirties . In that period Leontief built the first input-output models for the United States. In the almost fifty years that have passed since, contributions to Leontief’s system have been numerous; nowadays input-output analysis is widely used as a tool in economic theory and practice. However, despite the enormous progress that has been made, fundamental problems remain. This may partly be attributed to the fact that the “price-side” of the various Leontief models is still relatively underdeveloped. In theoretical work, prices are usually obtained as the solution to a dual problem, in empirical work they are typically standardized at unity. Another way of putting this is that connections between supply and demand as they exist in real markets are not incorporated in the present models (often linear ones). For example, most price models simply redistribute profits, focusing mainly on production costs. (See e.g. Fink (1981) for an extensive discussion of such models.)