Input-output Analysis Versus Consistency Analysis
Despite the clear ability of the input-output model to depict and analyze the dependence of one industry or sector on another, Leontief and others never managed to introduce the full spectrum of dependency relations in a market economy. In 2003, Mohammad Gani, a pupil of Leontief, introduced Consistency Analysis in his book 'Foundations of Economic Science' (ISBN 984320655X), which formally looks exactly like the input-output table but explores the dependency relations in terms of payments and intermediation relations. Consistency analysis explores the consistency of plans of buyers and sellers by decomposing the input-output table into four matrices, each for a different kind of means of payment. It integrates micro and macroeconomics in one model and deals with money in an ideology-free manner. It deals with the flow of funds via the movement of goods.
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