Profile Major Works Resources

Wassily Leontief, 1906-1999

Photo of W. Leontief


Wassily Leontief's name has been associated with a particular type of quantitative economics: input-output analysis.  A general equilibrium method of analysis, input-output models examine economic activity by studying the relationships between sectors. Although of fluctuating popularity, input-output analysis has been a mainstay of economics and economic policy and planning since Leontief introduced it in the 1940s.

Wassily Leontief was born into a well-to-do academic family in St. Petersburg, Russia.  His father was a labor economist at the local university, his mother an art historian.  Wassily Leontief enrolled at the University of Leningrad in 1921, at the tender age of fifteen.  He started out in philosophy, but eventually moved on to economics, earning his MA in 1925.  Finding times in Communist Russia difficult, his parents emigrated to Germany, bringing Leontief along with them.  Leontief enrolled for graduate studies at the University of Berlin, obtaining his Ph.D  in 1928 under Ladislaus von Bortkiewicz and Werner Sombart.  

Leontief joined the Kiel Institute in 1927, where the seeds of his input-output analysis were laid.  Input-output was partly inspired by the Marxian and Walrasian analysis of general equilibrium via inter-industry flows - which in turn has ancestral origins in Quesnay's Tableau Economique.   Leontief's interest was an outgrowth of the "multi-sectoral" approach to business cycles being followed by the Kiel School

In 1929-30, Leontief interrupted his research to spend a year in China as an economic consultant to the Chinese State railways.  Wassily Leontief moved to the United States in 1931, as a researcher at the NBER, intending to continue his research program into multi-sectoral economic systems.  A year later, Wassily Leontief took up a position at Harvard University in 1932.  Leontief joined Joseph Schumpeter in presiding over the "golden generation" of Harvard economics in 1930s.  However, it took some time to set in.  It was only after three years that Leontief was finally allowed to teach his specialty.  Leontief's "Price Analysis" seminar, launched in the Fall of 1935, would be the incubator of mathematical economics at Harvard.  Leontief's work at this time was largely in the vein of the Paretian revival, to which he made several seminal contributions (e.g. 1933).  But Leontief was already constructing an empirical example of his input-output system - an effort which yielded his 1941 classic, Structure of American Industry. Leontief followed up this work with a series of classical papers on input-output economics (collected in 1966).   Input-output was novel and inspired large-scale empirical work. It was used for economic planning throughout the world, whether in Western, Socialist or Third World countries, for the next half-century.

It was also of crucial theoretical importance. Input-output inspired the analysis of linear production systems, which were instrumental in the development of modern Neo-Walrasian theory.  Unusual for most economic contributions, Leontief's system was also crucial for the revival of  Classical Ricardian theory. The structure of input-output (albeit with some critical differences) was employed by Piero Sraffa and the Neo-Ricardians in the 1960s to resurrect the theories of Ricardo and Marx (although apparently neither Leontief nor Sraffa ever cited each other in their parallel work).

Leontief's contributions to economics were not limited to input-output. His 1936 article on "composite commodities" made him, together with Hicks, the father of that famous microeconomic theorem. His early reviews of Keynes's General Theory (1936, 1937, 1947, 1948) were important stepping stones to the Neo-Keynesian synthesis's stress on fixed nominal wages in interpreting Keynes's theory. Among his classic contributions are his 1933 article on the analysis of international trade via indifference curves, which is still learned today, his non-linear cobweb model (1934), and his 1946 contribution on the wage contract, which outlined what is now a classical application of the principal-agent model before that term was invented.  One of his more stirring contributions has been his 1953 finding that Americans were exporting labor-intensive rather than capital- intensive goods - the "Leontief Paradox" - which brought into question the validity of the conventional factor-proportions theory of international trade.

After having presided at Harvard for forty years,  Leontief moved to the C.V. Starr Center at New York University. As a critic, Leontief's repeated admonishment of economics for its misuse of mathematics and quantitative methods and the lack of relevance and realism in its theorizing (e.g. 1938, 1954, 1959, 1971) are both lucid, sharp and still pertinent. It was for his development of input-output that Wassily Leontief won the Nobel memorial prize in 1973.

 

  


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Major Works of Wassily Leontief

  • "Ein Versuch zur statistischen Analyse von Angebot und Nachfrage", 1929, WWA.(English title: "An Attempt for a Statistical Analysis of Supply and Demand”)
  • “Review of Egner Erich, Der Sinn des Monopols in der gegenwärtigen Wirschaftsordnung“, 1931, JPE
  • "The Use of Indifference Curves in the Analysis of Foreign Trade", 1933, QJE.
  • "Verzögerte Angebotsanpassung und partielles Gleichgewicht", 1934, ZfN (English 1966 trans. "Delayed Adjustment of Supply and Partial Equilibrium")
  • "Pitfalls in the Construction of Demand and Supply Curves: A Reply", 1934, QJE
  • "More Pitfalls in the Construction of Demand and Supply Curves: A Final Word", 1934, QJE.
  • "Interest on Capital and Distribution: A problem in the theory of marginal productivity", 1934, QJE
  • "Price-Quantity Variations in Business Cycles", 1935, REStat.
  • "The Fundamental Assumption of Mr. Keynes' Monetary Theory of Unemployment", 1936, QJE.
  • "Composite Commodities and the Problem of Index Numbers", 1936, Econometrica.
  • "Stackelberg on Monopolistic Competition", 1936, JPE.
  • "Quantitative Input and Output Relations in the Economic System of the United States", 1936, REStat [pdf]
  • "Interrelation of Prices, Output, Savings and Investment", 1936, REStat
  • "Implicit Theorizing: a methodological criticism of the Neo-Cambridge school", 1937, QJE.
  • "The Significance of Marxian Economics for Present-Day Economic Theory", 1938, AER.
  • "The Theory of Limited and Unlimited Discrimination", 1940, QJE.
  • The Structure of the American Economy, 1919-1939, 1941.
  • "The Pure Theory of the Guaranteed Annual Wage Contract", 1946, JPE.
  • "Introduction to a Theory of the Internal Structure of Functional Relationships", 1947, Econometrica.
  • "Wages, Profits, Prices and Taxes", 1947, Dun's Review.
  • "Postulates: Keynes's General Theory and the classicists", 1947, in Harris, editor, The New Economics.
  • "Note on the Pluralistic Interpretation of History and the Problem of Interdisciplinary Co-operation", 1948, J of Philosophy.
  • "Input-Output Economics", 1951, Scientific American.
  • "Machines and Man", 1952, Scientific American.
  • Studies in the Structure of the American Economy, 1953.
  • "Domestic Production and Foreign Trade: the American capital position re-examined", 1953, Proceedings of American Philosophical Society.
  • "Mathematics in Economics", 1954, Bulletin of the AMS. [ams]
  • "Some Basic Problems of Input-Output Analysis", 1955, in Input-Output Analysis: An appraisal  [nber]
  • "Factor Proportions and the Structure of American Trade: Further theoretical and empirical analysis", 1956, REStat.
  • "Theoretical Note on the Time-Preference, Productivity of Capital, Stagnation and Economic Growth", 1958, AER.
  • "The Problem of Quality and Quantity in Economics", 1959, Daedalus.
  • "The Rise and Decline of Soviet Economic Science", 1960, Foreign Affairs.
  • "The Economic Effects of Disarmament", with M. Hoffenberg, 1961, Scientific American.
  • "The Rates of Long Run Growth and Capital Transfer from Developed to Underdeveloped Areas", 1963, Proceedings of Conference on Role of Econometric Analysis.
  • "Modern Techniques for Economic Planning and Projection", 1963, Scuola in Azione.
  • "Multiregional Input-Output Analysis", with A. Strout, 1963, in Barna, editor, Structural Intedependence...
  • "The Structure of Development", 1963, Scientific American.
  • "When Should History be written Backwards?", 1963, Economic History Review.
  • "Proposal for Better Economic Forecasting", 1964, Harvard Business Review.
  • "On Assignment of Patent Rights on Inventions Made under Government Research Contracts", 1964, Harvard Law Review.
  • "Input-Output Analysis", 1965, Scientific American.
  • Input-Output Economics, 1966.
  • Essays in Economics: Theories and theorizing, 1966.
  • Essays in Economics, 1966.
  • "Environmental Repercussions and the Economic Structure: An Input-Output Approach", 1970, REStat
  • "Theoretical Assumptions and Non-Observed Facts", 1971, AER. [pdf]
  • "National Income, Economic Structure, and Environmental Externalities", 1973, in M. Moss, editor, Measurement of Economic and Social Performance [nber]
  •  "Structure of World Production: Outline of a simple input-output formulation", 1974, AER [nobel]
  • The Future of the World Economy, with A.P. Carter and P. Petri 1977.
  • "The Planning Approach to Economic Policy Formation", 1980, Rev economique.
  • Military Spending, with F. Duchin, 1983
  • The Future Impact of Automation on Workers, with F. Duchin, 1986.
  • "The Economy as a Circular Flow", 1991, SCED.
  • "Can Economics be Reconstructed as an Empirical Science?", 1993, AJAE
  • "Money-Flow Computations", with A. Brody, 1993, Econ Systems Research

 


HET

 

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Resources on Wassily Leontief

  • 1973 Nobel Memorial Prize [nobel.org]: press, facts, biography, lecture
  • "Vassili Leontief: interview", 1991, Revue d'econ financiere [pers]
  • Leontief papers/books at NBER [nber]
  • Input-Output Analysis: An appraisal, 1955 [nber]
  • Leontief page at IDEAS/Repec
  • Wassily Leontief Memorial Page at MIT
  •  [defunct]
  • "Our Wassily: W.W. Leontief (1905-1999)" by Paul Samuelson [iioa]
  • "Technological Advancement, Employment and the Distribution of Income: Leontief at 90" by Anne Carter, 1996 [gru]
  • "Leontief's Great Leap Forward: Beyond Quesnay, Marx and von Bortkiewicz" by William J. Baumol, 2000 [gru]
  • "Wassily Leontief and His Contributions to Economic Accounting" in Survey of Current Business, 1999 [bea]
  • "Wassily Leontief" by Ann Keene, at ANBO [anbo]
  • Leontief page at economicus.ru
  • Leontief  page at Nobel Prize Internet Archive  
  • "Wassily Leontief: A Note" by James K. Galbraith [lbj]
  • The International Input-Output Association (IIOA) [website]  
  • Leontief Center, in St. Petersburg, Russia [website]
  • Leontief Prize for Advancing the Frontiers of Economic Thought [prize at GDAE, Tufts]
  • "The Leontief Paradox" page at Iowa State
  • Leontief page at Alternatives economiques
  • Leontief obituary at Harvard Gazette
  • Leontief page at Concise Encyc of Economics, LibertyFund
  • Leontief page at Britannica
  • Wikipedia

 

 
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