Question

The technology matrix of an economic system of two industries is `|(0.50,0.30),(0.41,0.33)|` Test whether the system is viable as per Hawkins Simon conditions.

Answer 1

Technology matrix B = `|(0.50,0.30),(0.41,0.33)|`

I - B = `[(1,0),(0,1)] - [(0.50,0.30),(0.41,0.33)]`

`[(0.50,-0.30),(-0.41,0.67)]`, the main diagonal elements are positive.

|I - B| = `[(0.50,-0.30),(-0.41,0.67)]`

= 0.335 – 0.123

= 0.212, positive

Since the main diagonal elements of I – B are positive and |I – B| is positive, Hawkins-Simon conditions are satisfied.

Therefore, the given system is viable.