Wassily Leontief

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Wassily Wassilyovitch Leontief
W. W. Leontief at Harvard
W. W. Leontief at Harvard
Born August 5, 1905(1905-08-05)
Munich, Germany
Died February 5, 1999 (aged 93)
New York City, New York, USA
Nationality Russia
Fields Economics
Institutions New York University
Harvard University
Alma mater University of Berlin (Ph.D)
University of Leningrad (M.A.)
Doctoral advisor Ladislaus Bortkiewicz
Werner Sombart
Doctoral students Vernon Smith
Robert Solow
Paul Samuelson
Known for Input-output analysis
Notable awards Nobel Prize in Economics (1973)

Wassily Wassilyovitch Leontief (Russian: Василий Васильевич Леонтьев; August 5, 1905, Munich, Germany – February 5, 1999, New York)[1], was an economist notable for his research on how changes in one economic sector may have an effect on other sectors. Leontief won a Nobel Prize in Economics in 1973.

Contents

[edit] Biography

[edit] Early life

Wassily Leontief was born on August 5, 1905 in Munich, Germany as the son of Wassily W. Leontief (professor of Economics) and Zlata (or Genya, later Eugenia) Becker (see original birth certificate here). The Nobel Prize website, however, lists [1] his birth year as 1906 and place of birth as St. Petersburg. W. Leontief Sr. belonged to a dynasty of old-believer merchants living in St. Petersburg since 1741. Genya Becker belonged to a wealthy Jewish family from Odessa. At 15, Wassily Jr. entered the University of Leningrad in present day St. Petersburg in 1921. He earned his Learned Economist degree (equivalent to Master of Arts) in 1924 at the age of 19.

[edit] Opposition to communism

W. 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 Cheka.

In 1925, he was allowed to leave the USSR, mostly because Cheka believed that he was mortally ill (sarcoma). Later the diagnosis appeared to be a medical error. He continued his studies at the University of Berlin and, in 1928, he earned a Ph.D. degree in Economics with a dissertation on Circular Flows in Economics.

[edit] Early professional life

From 1927 to 1930, he worked at the Institute for the World Economicy of the University of Kiel. There he researched the derivation of statistical demand and supply curves. In 1929, he travelled to China to assist the 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 Office of Strategic Services.

[edit] Affiliation with Harvard

Harvard University employed him in its Department of Economics in 1932, and, in 1946, he became a professor of Economics.

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.[2]

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.

[edit] Affiliation with New York University

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

[edit] Personal

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

It is known that he 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 Leontief relocated his summer residence to Lakeville, Connecticut.

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

[edit] 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 famous 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. An unrealistic assumption of this analysis is that input proportions are fixed. It is for this reason that the use of input-output analysis is limited to rough approximizations rather than prediction. Input-output was novel and inspired large-scale empirical work. It has been used for economic planning throughout the world, whether in Western, Socialist or Third World countries.

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." There also exists a trend that can be seen in the U.S. that could explain Leontief's paradox, and this is that in the last four decades, money has been becoming more expensive while labor has been becoming cheaper.[citation needed]

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.

[edit] Publications

  • 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. Dochin
  • 1991:

[edit] Awards

[edit] In Honor

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

[edit] Memberships

[edit] Quote

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

[edit] See also

[edit] References

  1. ^ http://www.iioa.org/images/WL-Birth%20Certificate.gif
  2. ^ Lay, p.1
  • Lay, David C. (2003). Linear Algebra and Its Applications, Third Edition. Addison Wesley. ISBN 0-201-70970-8. 

[edit] External links

v • d • e
Nobel Laureates in Economics

Ragnar Frisch / Jan Tinbergen (1969) · Paul Samuelson (1970) · Simon Kuznets (1971) · John Hicks / Kenneth Arrow (1972) · Wassily Leontief (1973) · Gunnar Myrdal / Friedrich Hayek (1974) · Leonid Kantorovich / Tjalling Koopmans (1975)
Complete roster · 1969–1975 · 1976–2000 · 2001–present
Persondata
NAME Leontief, Wassily
ALTERNATIVE NAMES
SHORT DESCRIPTION Russian Economist
DATE OF BIRTH August 5, 1905
PLACE OF BIRTH Munich
DATE OF DEATH February 5, 1999
PLACE OF DEATH New York