Wassily Leontief

Last updated
Wassily Leontief
Wassily Leontief 1973.jpg
Born
Wassily Wassilyevich Leontief

(1905-08-05)August 5, 1905 [1]
DiedFebruary 5, 1999(1999-02-05) (aged 93)
Citizenship Russian Empire, Soviet Union, United States
Alma mater Frederick William University, (PhD)
University of Leningrad, (MA)
Known for Input-output analysis
Awards Nobel Memorial Prize in Economic Sciences (1973)
Scientific career
Fields Economics
Institutions University of Kiel
New York University
Harvard University
Thesis Wirtschaft als Kreislauf (1928)
Doctoral advisor Ladislaus Bortkiewicz
Werner Sombart
Doctoral students Paul Samuelson
Thomas Schelling
Robert Solow
Kenneth E. Iverson
Vernon L. Smith
Richard E. Quandt
Hyman Minsky
Khodadad Farmanfarmaian [3]
Dale W. Jorgenson [4]
Michael C. Lovell
Karen R. Polenske
F.M. Scherer
Influences Léon Walras
Influenced George B. Dantzig

Wassily Wassilyevich Leontief (Russian : Василий Васильевич Леонтьев; August 5, 1905 – February 5, 1999), was a Russian-American economist known for his research on input-output analysis and how changes in one economic sector may affect other sectors. [5]

Contents

Leontief won the Nobel Committee's Nobel Memorial Prize in Economic Sciences in 1973, and four of his doctoral students have also been awarded the prize (Paul Samuelson 1970, Robert Solow 1987, Vernon L. Smith 2002, Thomas Schelling 2005).

Biography

Early life

Wassily Leontief was born on August 5, 1906, in Munich, Germany, the son of Wassily W. Leontief (professor of Economics) and Zlata (German spelling Slata; later Evgenia) Leontief (née Becker). [6] [7] W. Leontief, Sr., belonged to a family of old-believer merchants living in St. Petersburg since 1741. [8] Genya Becker belonged to a wealthy Jewish family from Odessa. [9] 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 1925 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. [8] He continued his studies at the Frederick William University in Munich and, in 1928 earned a Ph.D. degree in economics under the direction of Werner Sombart, writing his dissertation on The Economy as Circular Flow (original German title: Die Wirtschaft als Kreislauf).

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. [ citation needed ]

Affiliation with Harvard

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

In 1949, Leontief used an early computer at Harvard and data from 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, [10] [11] [12] [13] along with George W. Snedecor's usage of the Atanasoff–Berry computer.

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. He taught graduate and undergraduate classes.

Personal

In 1932, Leontief married the poet Estelle Marks. Their only child, Svetlana Leontief Alpers, was born in 1936. Estelle wrote a memoir, Genia and Wassily, [9] of their relations with his parents after they came to the US as émigrés.

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.[ citation needed ]

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

Major contributions

Leontief is credited with developing early contributions to input-output analysis and earned the Nobel Prize in Economics for his development of its associated theory. 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. [14] [15] [16]

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." [17]

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 non-observed facts". [17] 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

Awards

In honor

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

Leontief is listed in the Russian-American Chamber of Fame of Congress of Russian Americans, which is dedicated to Russian immigrants who made outstanding contributions to American science or culture. [19] [20] [21]

Memberships

Quotes

Much of current academic teaching and research has been criticized for its lack of relevance, that is, of immediate practical impact. ... The trouble is caused, however, not by an inadequate selection of targets, but rather by our inability to hit squarely on them, ... by the palpable inadequacy of the scientific means with which they try to solve them. ... The weak and all too slowly growing empirical foundations clearly cannot support the proliferating superstructure of pure, or should I say, speculative economic theory.... By the time it comes to interpretations of the substantive conclusions, the assumptions on which the model has been based are easily forgotten. But it is precisely the empirical validity of these assumptions on which the usefulness of the entire exercise depends. ... A natural Darwinian feedback operating through selection of academic personnel contributes greatly to the perpetuation of this state of affairs. [22]

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. [23]

See also

References and sources

  1. "The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1973". NobelPrize.org.
  2. Wassily Leontief Birth Certificate. U.S. Library of Congress
  3. Harvard IOHP | Khodadad Farmanfarmaian Transcripts. Fas.harvard.edu. Retrieved on 2017-09-06.
  4. Jorgenson, Dale W. (1998) Growth, Vol. 1: Econometric General Equilibrium Modeling. Cambridge, Massachusetts: MIT Press. ISBN   026226322X
  5. Dalyell, Tam (11 February 1999). "Obituary: Wassily Leontief". The Independent. Retrieved 18 May 2019.
  6. See birth data, provided October 4, 2005 Archived January 14, 2007, at the Wayback Machine . In his Nobel Prize website biographical information it states that recent information sets his year of birth to 1905.
  7. Bjerkholt, Olav, and Heinz D. Kurz (2006). "Introduction: the History of Input–Output Analysis, Leontief's Path and Alternative Tracks". Economic Systems Research. 18 (4): 331–33. doi:10.1080/09535310601020850.CS1 maint: multiple names: authors list (link)
  8. 1 2 Kaliadina, Svetlana A.; Pavlova, Natal'ia Iu.; Wittich, Claus (2006). "The Family of W. W. Leontief in Russia". Economic Systems Research. 18 (4): 335. doi:10.1080/09535310601020876.
  9. 1 2 Estelle Leontief (1987). Genia & Wassily: a Russian-American memoir. Zephyr Press. ISBN   978-0-939010-11-0.
  10. Lay, David C. (2003). Linear Algebra and Its Applications (Third ed.). Addison Wesley. p.  1. ISBN   0-201-70970-8.
  11. Polenske, Karen R. (2004). "Leontief's 'magnificent machine' and other contributions to applied economics". Wassily Leontief and Input-Output Economics. Cambridge University Press. p. 12.
  12. See also, Leontief, Input-Output Economics (Scientific American, 1951) reprinted in Input-Output Economics (1966).
  13. Iverson, Kenneth E. (1954). Machine Solutions of Linear Differential Equations Applications to a Dynamic Economic Model, Ph.D. Thesis. Harvard University.
  14. PageRank-Type Algorithm From the 1940s Discovered – Slashdot. Science.slashdot.org (2010-02-17). Retrieved on 2017-09-06.
  15. Scientist Finds PageRank-Type Algorithm from the 1940s – MIT Technology Review. Technologyreview.com (2010-02-17). Retrieved on 2017-09-06.
  16. Massimo Franceschet (2010). "PageRank: Standing on the shoulders of giants". arXiv: 1002.2858 [cs.IR].
  17. 1 2 "Wassily Leontief (1906–1999)". Econlib. Library of Economics and Liberty. 5 May 2014. Retrieved 5 May 2014.
  18. Wassily Leontief (1986). Input-output Economics. Oxford University Press. ISBN   978-0-19-503527-8.
  19. European Russians: The place of Russian Emigration in US Science and technology. Eurorussians.com. Retrieved on 2017-09-06.
  20. Anatoly Bezkorovainy (2008). All Was Not Lost: Journey of a Russian Immigrant from Riga to Chicagoland. AuthorHouse. p. 457. ISBN   9781434364586 . Retrieved August 15, 2017.
  21. CRA Hall of Fame. Russian-americans.org.
  22. Leontief, W., Theoretical Assumptions and nonobserved Facts, American Economic Review, Vol. 61, No. 1 (March 1971), pp. 1–7; Presidential address to the American Economic Association 1970.
  23. Hallak, Jacques; Caillods, Françoise (1995). Educational Planning: The International Dimension. ISBN   9780815320241.
Awards
Preceded by
John R. Hicks
Kenneth J. Arrow
Laureate of the Nobel Memorial Prize in Economics
1973
Succeeded by
Gunnar Myrdal
Friedrich August von Hayek

Related Research Articles

Oliver E. Williamson American economist

Oliver Eaton Williamson was an American economist, a professor at the University of California, Berkeley, and recipient of the 2009 Nobel Memorial Prize in Economic Sciences, which he shared with Elinor Ostrom. His transaction costs theories are influential in the social sciences.

Robert Solow American economist

Robert Merton Solow, GCIH, is an American economist whose work on the theory of economic growth culminated in the exogenous growth model named after him. He is currently Emeritus Institute Professor of Economics at the Massachusetts Institute of Technology, where he has been a professor since 1949. He was awarded the John Bates Clark Medal in 1961, the Nobel Memorial Prize in Economic Sciences in 1987, and the Presidential Medal of Freedom in 2014. Four of his PhD students, George Akerlof, Joseph Stiglitz, Peter Diamond and William Nordhaus later received Nobel Memorial Prizes in Economic Sciences in their own right.

Paul Samuelson American economist

Paul Anthony Samuelson was an American economist. The first American to win the Nobel Memorial Prize in Economic Sciences, the Swedish Royal Academies stated, when awarding the prize in 1970, that he "has done more than any other contemporary economist to raise the level of scientific analysis in economic theory". Economic historian Randall E. Parker has called him the "Father of Modern Economics", and The New York Times considered him to be the "foremost academic economist of the 20th century".

Simon Kuznets economist

Simon Smith Kuznets was an American economist and statistician who received the 1971 Nobel Memorial Prize in Economic Sciences "for his empirically founded interpretation of economic growth which has led to new and deepened insight into the economic and social structure and process of development."

In economics, an input–output model is a quantitative economic model that represents the interdependencies between different sectors of a national economy or different regional economies. Wassily Leontief (1906–1999) is credited with developing this type of analysis and earned the Nobel Prize in Economics for his development of this model.

William Baumol American economist

William Jack Baumol was an American economist. He was a professor of economics at New York University, Academic Director of the Berkley Center for Entrepreneurship and Innovation, and Professor Emeritus at Princeton University. He was a prolific author of more than eighty books and several hundred journal articles,

Leontief's paradox in economics is that a country with a higher capital per worker has a lower capital/labor ratio in exports than in imports.

In economics, gross output (GO) is the measure of total economic activity in the production of new goods and services in an accounting period. It is a much broader measure of the economy than gross domestic product (GDP), which is limited mainly to final output. As of first-quarter 2019, the Bureau of Economic Analysis estimated gross output in the United States to be $37.2 trillion, compared to $21.1 trillion for GDP.

Evsey David Domar was a Russian American economist, famous as developer of the Harrod–Domar model.

Christopher A. Sims American time-series statistician and econometrician, developer of vector auto-regressive models, Bayesian statistician, President of the Econometric Society, 2011 winner of the Nobel Prize

Christopher Albert "Chris" Sims is an American econometrician and macroeconomist. He is currently the John J.F. Sherrerd '52 University Professor of Economics at Princeton University. Together with Thomas Sargent, he won the Nobel Memorial Prize in Economic Sciences in 2011. The award cited their "empirical research on cause and effect in the macroeconomy".

Bina Agarwal Indian development economist

Bina Agarwal is an Indian development economist and Professor of Development Economics and Environment at the Global Development Institute at The University of Manchester. She has written extensively on land, livelihoods and property rights; environment and development; the political economy of gender; poverty and inequality; legal change; and agriculture and technological transformation. Among her best known works is the award-winning book—A Field of One's Own: Gender and Land Rights in South Asia—which has had a significant impact on governments, NGOs, and international agencies in promoting women's rights in land and property. This work has also inspired research in Latin America and globally.

Victor Bulmer-Thomas CMG OBE is a British academic who has specialised in Latin America and the Caribbean. Born in London, his first experience of the Americas was as a V.S.O. in Belize (1966/7), where he taught several of the current leaders of the country. He studied at New College, Oxford University for his undergraduate degree, where he obtained a first. In 1975 he graduated with a PhD from St Antony's College, Oxford, with an original dissertation on Costa Rica where he pioneered the concept of constructing databases from primary sources and applying them to Latin American economic history. While at university, he became involved in left-wing student politics.

Eric Maskin American Nobel laureate in economics

Eric Stark Maskin is an American economist and 2007 Nobel laureate recognized with Leonid Hurwicz and Roger Myerson "for having laid the foundations of mechanism design theory". He is currently Adams University Professor and Professor of Economics and Mathematics at Harvard University.

The International Input-Output Association (IIOA) is a scientific, nonprofit, membership organization to facilitate development of input–output analysis in economics and interdisciplinary areas of inquiry.

Walter Isard was a prominent American economist, the principal founder of the discipline of Regional Science, as well as one of the main founders of the discipline of Peace Science and Peace Economics.

Abhijit Banerjee American economist

Abhijit Vinayak Banerjee is an Indian American economist who is currently the Ford Foundation International Professor of Economics at Massachusetts Institute of Technology. Banerjee shared the 2019 Nobel Memorial Prize in Economic Sciences with Esther Duflo and Michael Kremer "for their experimental approach to alleviating global poverty". Along with Esther Duflo, they are the sixth married couple to jointly win a Nobel Prize.

Faye Duchin is an American Computer Scientist and Professor of Economics at Rensselaer Polytechnic Institute ("RPI"), where she was the Dean of the School of Humanities and Social Sciences from 1996 to 2002. She is active in the fields of ecological economics and industrial ecology and employs Input-Output Analysis in her work. Her faculty page at RPI states that she is "concerned with ways of achieving economic development while avoiding environmental disasters."

Karen Rosel Polenske is an American regional economist specialized in energy, environmental, and infrastructure analyses, and input-output accounts and models, particularly at the subnational scale. She is currently the Peter de Florez Professor of Regional Political Economy at the Massachusetts Institute of Technology (MIT).

Lance Jerome Taylor is a well known structuralist macroeconomist, working to understand the macroeconomy through “its major institutions and distributive relationships across productive sectors and social groups." He is the Arnhold Professor of International Cooperation and Development and director of the Center for Economic Policy Analysis at the New School for Social Research, where he has taught and worked since 1993. As a professor, he teaches students who come in with "a critical attitude about economics," aiming to encourage that "progressive perspective" while providing them "the standard technical tools of economics."

Anne Pitts Carter is an American educator and economist, specializing in technical change and technology transfer.