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Wassily Leontief

Wassily Wassilyovich Leontief (; August 5, 1906, Munich, GermanyFebruary 5, 1999, New York),[1] was a Russian-American economist notable for his research on how changes in one economic sector may have an effect on other sectors. Leontief won the Nobel Committee's Nobel Memorial Prize in Economic Sciences in 1973, and three of his doctoral students have also been awarded the prize (Paul Samuelson 1970, Robert Solow 1987, Vernon L. Smith 2002).

Contents


Biography

Early life

Wassily Leontief was born on August 5, 1905, in Munich, Germany, the son of Wassily W. Leontief (professor of Economics) and Slata (later Evgenia, called Genya) Leontief (n e Becker).[2] W. Leontief, Sr., belonged to a dynasty of old-believer merchants living in St. Petersburg since 1741.[3] Genya Becker belonged to a wealthy Jewish family from Odessa. At 15 in 1921, Wassily, Jr., entered University of Leningrad in present day St. Petersburg. He earned his Learned Economist degree (equivalent to Master of Arts) in 1924 at the age of 19.

Opposition in USSR

Leontief sided with campaigners for academic autonomy, freedom of speech and in support of Pitirim Sorokin. As a consequence, he was detained several times by the Cheka. In 1925, he was allowed to leave the USSR, mostly because the Cheka believed that he was mortally ill with a sarcoma, a diagnosis that later proved false.[4] He continued his studies at the University of Berlin and, in 1928 earned a Ph.D. degree in economics under the direction of Werner Sombart, writing his dissertation on Circular Flows in Economics.

Early professional life

From 1927 to 1930, he worked at the Institute for the World Economy of the University of Kiel. There he researched the derivation of statistical demand and supply curves. In 1929, he traveled to China to assist its ministry of railroads as an advisor.

In 1931, he went to the United States and was employed by the National Bureau of Economic Research.

During World War II, Leontief served as consultant at the U. S. Office of Strategic Services.

Affiliation with Harvard

Leontief joined Harvard University's department of economics in 1932 and in 1946 became professor of economics there.

Around 1949, Leontief used the primitive computer systems available at the time at Harvard to model data provided by the U.S. Bureau of Labor Statistics to divide the U.S. economy into 500 sectors. Leontief modeled each sector with a linear equation based on the data and used the computer, the Harvard Mark II, to solve the system, one of the first significant uses of computers for mathematical modeling.[5]

Leontief set up the Harvard Economic Research Project in 1948 and remained its director until 1973. Starting in 1965, he chaired the Harvard Society of Fellows.

Affiliation with New York University

In 1975, Leontief joined New York University and founded and directed the Institute for Economic Analysis.

Personal

In 1932, Leontief married poet Estelle Marks. Their only child, Svetlana Leontief Alpers, was born in 1936.

As hobbies Leontief enjoyed fly fishing, ballet, and fine wines. He vacationed for years at his farm in West Burke, Vermont, but after moving to New York in the 1970s moved his summer residence to Lakeville, Connecticut.

Leontief died in New York City on Friday, February 5, 1999 at the age of 93. His wife died in 2005.

Major contributions

Leontief is primarily associated with the development of the linear activity model of General equilibrium and the use of input-output analysis that results from it. He has also made contributions in other areas of economics, such as international trade where he documented the Leontief paradox. He was also one of the first to establish the composite commodity theorem.

Leontief earned the Nobel Prize in economics for his work on input-output tables. Input-output tables analyze the process by which inputs from one industry produce outputs for consumption or for inputs for another industry. With the input-output table, one can estimate the change in demand for inputs resulting from a change in production of the final good. The analysis assumes that input proportions are fixed; thus the use of input-output analysis is limited to rough approximations rather than prediction. Input-output was novel and inspired large-scale empirical work; in 2010 its iterative method was recognized as an early intellectual precursor to Google's PageRank.[6][7][8]

Leontief used input-output analysis to study the characteristics of trade flow between the U.S. and other countries, and found what has been named Leontief's paradox; "this country resorts to foreign trade in order to economize its capital and dispose of its surplus labor, rather than vice versa", i.e., U.S. exports were relatively labor-intensive when compared to U.S. imports. This is the opposite of what one would expect, considering the fact that the U.S.'s comparative advantage was in capital-intensive goods. According to some economists, this paradox has since been explained as due to the fact that when a country produces "more than two goods, the abundance of capital relative to labor does not imply that the capital intensity of its exports should exceed that of imports."

Leontief was also a very strong proponent of the use of quantitative data in the study of economics. Throughout his life Leontief campaigned against "theoretical assumptions and nonobserved facts". According to Leontief, too many economists were reluctant to "get their hands dirty" by working with raw empirical facts. To that end, Wassily Leontief did much to make quantitative data more accessible, and more indispensable, to the study of economics.

Publications

  • 1925: Balans Narodnogo Chozjajstva SSR in Planovoe Chozjajstvo translated into Italian in Spulber N.(Ed.) as Il Bilancio dell economia nazionale dell URSS. in La Strategia Sovietica per Sviluppo Economico 1924-1930, Giulio Einaudi editore, Torino [discussing the Soviet Balance of the National Economy , 1923-4]
  • 1928: Die Wirtschaft als Kreislauf, T bingen: Mohr: re-published as The economy as a circular flow, pp. 181-212 in: Structural Change and Economic Dynamics, Volume 2, Issue 1, June 1991.
  • 1941: Structure of the American Economy, 1919-1929
  • 1953: Studies in the Structure of the American Economy
  • 1966: Input-Output Economics
  • 1966: Essays in Economics
  • 1977: Essays in Economics, II
  • 1977: The Future of the World Economy
  • 1983: Military Spending: Facts and Figures, Worldwide Implications and Future Outlook co-authed with F. Duchin.
  • 1983: The Future of Non-Fuel Minerals in the U. S. And World Economy co-authed with J. Koo, S. Nasar and I. Sohn
  • 1986: The Future Impact of Automation on Workers co-authed with F. Duchin

Awards

In Honor

The Global Development and Environment Institute at Tufts University awards the Leontief Prize in Economics each year in his honor.

Memberships

Quotes

* We move from more or less plausible but really arbitrary assumptions, to elegantly demonstrated but irrelevant conclusions.

* The role of humans as the most important factor of production is bound to diminish in the same way that the role of horses in agricultural production was first diminished and then eliminated by the introduction of tractors.[9]

See also

References

External links

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