Wassily Leontief

Wassily Wassilyevich Leontief Russian: Васи́лий Васи́льевич Лео́нтьев; August 5, 1905 – February 5, 1999, was the Soviet-American economist requested for his research on input–output analysis together with how reform in one economic sector may impact other sectors.

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

Major contributions

Leontief is credited with development early contributions to input–output analysis and earned the Nobel Prize in Economics for his developing of its associated theory. He has also featured 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 develope on input–output tables. Input–output settings analyze the process by which inputs from one industry cause outputs for consumption or for inputs for another industry. With the input–output table, one can estimate the modify in demand for inputs resulting from a change in production of thegood. The analysis assumes that input proportions are fixed; thus the usage 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.

Leontief used input–output analysis to explore 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 sorting 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. it is opposite of what one would expect, considering the fact that the U.S.'s comparative usefulness 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 explore of economics. Throughout his life Leontief campaigned against "theoretical assumptions and non-observed facts". According to Leontief, too many economists were reluctant to "get their hands dirty" by works 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.