Input-output analysis is the main tool to help us answer three key questions that pertain to the economy as a whole. What is the performance of an economy, in terms of efficiency and productivity growth? What is the comparative advantage of an economy vis-à-vis the rest of the world? How are these measures affected when environmental constraints are taken into account? Of course, many other interesting questions can be posed.

The focus on the economy as a whole gives input-output analysis a macroeconomic flavor, but its foundation and techniques are more microeconomic, including a rigorous grounding in production and consumption. Some people argue that it is at the interface of the two and define it as the study of industries or sectors of the economy. The name mesoeconomics has been coined for this.

Input-output analysis may be considered a rather mechanical tool, not be easily applicable to free market economies with competitive valuations. Specialized as well as general textbooks reinforce this perception, but it is my goal to undermine it.

This book presents input-output analysis from a mainstream economic perspective. It offers a unified, simultaneous treatment of the so-called “quantity and value systems.” The main framework is the United Nations' System of National Accounts (SNA), an ingenious device to provide a coherent snapshot of all the sectors of an economy; the main tool is that of linear programming.