A Measure of Systemic Risk Derived from the Input-Output Table

We now turn to a consideration of economic matters. In a previous section, we touched on the pioneering contributions of classical political scientists like William Harvey, William Petty, and François Quesnay, all of whom were medical doctors. These individuals conceptualized the economic system in a way that was similar to blood circulation as a kind of node-based network constituted by the circular processing of materials, resources, and services. Quesnay’s economic table was the first monumental achievement in this context. Over the course of the 20th century, the forms of this table have changed, as evidenced in Leontief’s input-output table and von Neumann-Sraffa’s production system. The input-output table has been selected here for empirical reasons.