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What I remember from economics about input/output analysis is that it basically analyses the interdependencies between business sectors and demand. If we use matrices we have $A$ as the input-output matrix, $I$ as an identity matrix and $d$ as final demand. In order to find the final input $x$ we may solve the Leontief Inverse:

$$ x = (I-A)^{-1}\cdot d $$

So here's my question: Is there a simple rationale behind this inverse? Especially when considering the form:

$$ (I-A)^{-1} = I+A + A^2 + A^3\ldots $$

What happens if we change an element $a_{i,j}$ in $A$? How is this transmitted within the system? And is there decent literature about this behaviour around? Thank you very much for your help!

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    Thanks to your question, I learnt about Input-Output Analysis. I found the following paper which might be related to your question: titled "TECHNICAL COEFFICIENTS CHANGE BY BI-PROPORTIONAL ECONOMETRIC ADJUSTMENT FUNCTION" http://www.iioa.org/pdf/14th%20conf/kratena_zakarias.pdf2012-01-07
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    thanks for the comment but i think that's not quite what i was looking for.2012-01-18

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