Wassily Leontief – Father of the Input-Output Analysis Model

Wassily Leontief won the Nobel Prize in 1973 for conducting a special research on quantitative economics, known as the ‘Input-Output Analysis’.

This analysis is deeply influenced by the Marxian and Walrasian analyses of the general equilibrium through the interaction of industries. The ‘Input-Output Analysis’ is actually derived from the multi-sectoral approach followed by the Kiel School and has enjoyed a significant place in economical analysis for the past half a century.

Wassily Leontief won the Nobel Prize in 1973 for conducting a special research on quantitative economics, known as the ‘Input-Output Analysis’.

This analysis is deeply influenced by the Marxian and Walrasian analyses of the general equilibrium through the interaction of industries. The ‘Input-Output Analysis’ is actually derived from the multi-sectoral approach followed by the Kiel School and has enjoyed a significant place in economical analysis for the past half a century.

Personal Life and Educational Career

Wassily Leontief was born into an erudite family on 5th August 1905. His father Wassily W. Leontief was a professor of economics and belonged to the wealthy dynasty of merchants of St. Petersburg. His mother Genya Becker also hailed from a wealthy Jewish family. At the age of fifteen, Leontief junior moved to the University of Leningrad in 1921. At the age of nineteen, he obtained his Master’s Degree in economics from the same university. His dissertation paper for which he earned his PhD degree was on ‘Circular Flows in Economics’.

Professional Life of Wassily Leontief

He embarked on his professional career with the University of Kiel where he worked at the Institute of World Economics till 1930. His research topic in that institute was the derivation of statistical demand and supply curves. From there he moved on to assist the Ministry of Railroads in China as an advisor. Leontief went on to be associated with the National Bureau of Economic Research in United States in 1931. Moreover, during the World War II he served as the consultant at the Office of Strategic Services. During 1946, Leontief was appointed the professor of economics in Harvard University. There, he set up the Harvard Economic Research Project in 1948 and held the position of Director till 1973. He chaired the Harvard Society of Fellows from 1965 as well. Leontief also worked at the New York University in 1975, where he established and directed the Institute for Economic Analysis.

Contribution to Economics

Leontief is chiefly associated with the development of the linear activity model of general equilibrium and the application of input-output analysis where it is derived from. He has made contributions in other areas of economics as well, including international trade where he composed the famous Leontief paradox. His input-output analysis gave rise to his 1941 classic, Structure of American Industry.

Leontief won the Nobel Prize in Economics in 1973 for his contribution in input-output tables. Input-output tables analyze the linear production system which played a major role in the development of modern Neo-Walrasian Theory. With the input-output table, one can estimate any changes in the demand for input resulting from any change in the level of production of the final product.

Leontief’s contributions to the discipline of economics were not confined to his input-output analysis. One of his most stunning contributions has been his 1953 finding that Americans were exporting labor-intensive instead of capital- intensive goods: the “Leontief Paradox”, which brought into focus the validity of the conventional factor-proportions theory of international trade.

Major Publications by Wassily Leontif

Wassily Leontif has written innumerable books through out his life:

The Use of Indifference Curves in the Analysis of Foreign Trade

Input-Output Economics, 1951, Scientific American.

The Fundamental Assumption of Mr. Keynes’s Monetary Theory of Unemployment

The Problem of Quality and Quantity in Economics

Input-Output Analysis

Structure of World Production: Outline of a simple input-output formulation