Wassily Leontief was born in St. Petersburg, Russia. He earned his doctorate in economics at the University of Berlin. He was president of the American Economic Association in 1970 and 1971. He 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. In 1953 and 1956, 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 becom ing cheaper. Leontief was also a very strong proponent of the use of quantitative data in the study of economics.
Works by Wassily Leontief:
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