( q Y
DET = 1 - — I
1 - q22 I - q12 q21
g1
g 2 j g1 g 2
This is obviously not affected by the price level of either good.
Turning now to the rest of the employment matrix:
N= 1
DET
(P1 f1 )n1 C - q22P2 I
( g1P1) l g 2 P 2 j
(q21p2)n2(f1p1)
(g1P1)(g2P2)
(q12P1)n1(f2P2)
(g1P1)(g2P2)
(f2 P 2) n 2 Г1 - q11 P1 I
( g 2 P 2) l g1P1 j
It is clear that the employment generated by final demand in the different industries is not
affected by variations in the price level of the goods produced.
This result hinges on only one hypothesis: the price of a good does not depend on its
destination, whether it is used as intermediate good (purchased by a industry) or it is directed
to final demand. This is already a key assumption for the technology of the input-output system.
50
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