Wassily Leontief

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Wassily Leontief
Wassily Leontief 1973.jpg
Born
Wassily Wassilyevich Leontief

(1906-08-05)August 5, 1906 [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]

Russian language East Slavic language

Russian is an East Slavic language, which is official in the Russian Federation, Belarus, Kazakhstan and Kyrgyzstan, as well as being widely used throughout Eastern Europe, the Baltic states, the Caucasus and Central Asia. It was the de facto language of the Soviet Union until its dissolution on 25 December 1991. Although nearly three decades have passed since the breakup of the Soviet Union, Russian is used in official capacity or in public life in all the post-Soviet nation-states, as well as in Israel and Mongolia.

Economist professional in the social science discipline of economics

An economist is a practitioner in the social science discipline of economics.

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.

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).

The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics, is an award for outstanding contributions to the field of economics, and generally regarded as the most prestigious award for that field. The award's official name is The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

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".

Robert Solow American economist

Robert Merton Solow, GCIH, is an American economist, particularly known for his work on the theory of economic growth that 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.

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.

Munich Capital and most populous city of Bavaria, Germany

Munich is the capital and most populous city of Bavaria, the second most populous German federal state. With a population of around 1.5 million, it is the third-largest city in Germany, after Berlin and Hamburg, and thus the largest which does not constitute its own state, as well as the 12th-largest city in the European Union. The city's metropolitan region is home to 6 million people. Straddling the banks of the River Isar north of the Bavarian Alps, it is the seat of the Bavarian administrative region of Upper Bavaria, while being the most densely populated municipality in Germany. Munich is the second-largest city in the Bavarian dialect area, after the Austrian capital of Vienna.

Economics Social science that analyzes the production, distribution, and consumption of goods and services

Economics is the social science that studies the production, distribution, and consumption of goods and services.

Old Believers

In Eastern Orthodox church history, especially within the Russian Orthodox Church, the Old Believers or Old Ritualists are Eastern Orthodox Christians who maintain the liturgical and ritual practices of the Eastern Orthodox Church as they were before the reforms of Patriarch Nikon of Moscow between 1652 and 1666. Resisting the accommodation of Russian piety to the contemporary forms of Greek Orthodox worship, these Christians were anathematized, together with their ritual, in a Synod of 1666–67, producing a division in Eastern Europe between the Old Believers and those who followed the state church in its condemnation of the Old Rite.

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 Berlin 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).

Pitirim Sorokin American sociologist

Pitirim Alexandrovich Sorokin was a Russian-born American sociologist and political activist, best known for his contributions to the social cycle theory.

KGB Main security agency for the Soviet Union

The KGB, translated in English as Committee for State Security, was the main security agency for the Soviet Union from 1954 until its break-up in 1991. As a direct successor of preceding agencies such as the Cheka, NKGB, NKVD and MGB, the committee was attached to the Council of Ministers. It was the chief government agency of "union-republican jurisdiction", acting as internal security, intelligence and secret police. Similar agencies were constituted in each of the republics of the Soviet Union aside from Russian SFSR, and consisted of many ministries, state committees and state commissions.

Sarcoma cell type cancer that has material basis in abnormally proliferating cells derived from embryonic mesoderm

A sarcoma is a cancer that arises from transformed cells of mesenchymal origin. Connective tissue is a broad term that includes bone, cartilage, fat, vascular, or hematopoietic tissues, and sarcomas can arise in any of these types of tissues. As a result, there are many subtypes of sarcoma, which are classified based on the specific tissue and type of cell from which the tumor originates. It is important to note that sarcomas are primary connective tissue tumors, meaning that they arise in connective tissues. This is in contrast to secondary connective tissue tumors, which occur when a cancer from elsewhere in the body spreads to the connective tissue. The word sarcoma is derived from the Greek σάρξ sarx meaning "flesh".

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.

Kiel Institute for the World Economy

The Kiel Institute for the World Economy is an independent, non-profit economic research institute and think tank based in Kiel, Germany. In 2017, it was ranked as one of the top 50 most influential think tanks in the world and was also ranked in the top 15 in the world for economic policy specifically. German business newspaper, Handelsblatt, referred to the Institute as "Germany's most influential economic think tank", while Die Welt, stated that "The best economists in the world are in Kiel".

University of Kiel university

The University of Kiel, officially the Christian-Albrecht University of Kiel, is a university in the city of Kiel, Germany. It was founded in 1665 as the Academia Holsatorum Chiloniensis by Christian Albert, Duke of Holstein-Gottorp and has approximately 27,000 students today. Kiel University is the largest, oldest, and most prestigious in the state of Schleswig-Holstein. Until 1864/66 it was not only the northernmost university in Germany but at the same time the 2nd largest university of Denmark. Faculty, alumni, and researchers of the Kiel University have won 12 Nobel Prizes. Kiel University has been a member of the German Universities Excellence Initiative since 2006. The Cluster of Excellence The Future Ocean, which was established in cooperation with the GEOMAR Helmholtz Centre for Ocean Research Kiel in 2006, is internationally recognized. The second Cluster of Excellence "Inflammation at Interfaces" deals with chronic inflammatory diseases. The Kiel Institute for the World Economy is also affiliated with Kiel University.

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

National Bureau of Economic Research American private nonprofit research organization

The National Bureau of Economic Research (NBER) is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community." The NBER is well known for providing start and end dates for recessions in the United States.

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.

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.

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 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 (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.Cite journal requires |journal= (help)
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

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