Wassily Leontief Aumann Biography - Nobel Prize Winner (1973)

 


Wassily Leontief (August 5, 1906 – February 5, 1999), born at St. Petersburg, Russia), was an economist notable for his research on how changes in one economic sector may have an effect on other sectors. Leontief won Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel in 1973.

Biography

Early life
Wassily Leontief, the son of Wassily W. Leontief (professor of Economics) and Eugenia, entered the University of Leningrad in present day St. Petersburg in 1921. He earned his Learned Economist degree (equivalent to Master of Arts) in 1925 at the age of 19.

Opposition to Communism
He was arrested several times because of his opposition to Communism.

In 1925 he was allowed to leave the USSR, so he continued his studies at the University of Berlin ([1]) and in 1929 he earned a Ph.D. degree in Economics with a specialty in Input-Output Analysis and Economics.

Early Professional Life
From 1927 to 1930 he worked at the Institute for World Economics of the University of Kiel ([2]). 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 USA, and was employed by the National Bureau of Economic Research ([3]).

Marriage and Affiliation with Harvard
In 1932 Leontief married the poet Estelle Marks. His wife died in 2005. Their only child, Svetlana Leontief Alpers, was born in 1936.

Harvard University ([4]) employed him in the same year (1932) in its Department of Economics ([5]), 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.

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.

Affiliation with New York University
In 1975 Leontief joined New York University ([6]) and founded and directed the Center for Economic Analysis.

Death
Leontief died in New York City, New York, USA, on Friday, February 5, 1999 at the age of 93.

Personal
It is known that he enjoyed trout fishing, ballet, and fine wines.

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 becom ing cheaper. 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.



LIST OF NOBEL PRIZE WINNERS IN ECONOMY
Akerlof, George A.
Allais, Maurice
Arrow, Kenneth J.
Aumann, Robert J.
Becker, Gary S.
Buchanan, James M., Jr.
Coase, Ronald H.
Debreu, Gerard
Engle, Robert F.
Fogel, Robert W.
Friedman, Milton
Frisch, Ragnar
Granger, Clive W. J.
Haavelmo, Trygve
Harsanyi, John C.
Heckman, James J.
Hayek, Friedrich August Von
Hicks, Sir John R.
Kahneman, Daniel
Kantorovich, Leonid Vitaliyevich
Klein, Lawrence R.
Koopmans, Tjalling C.
Kuznets, Simon
Kydland, Finn E.
Leontief, Wassily
Lewis, Sir Arthur
Lucas, Robert
Markowitz, Harry M.
McFadden, Daniel L.
Meade, James E.
Merton, Robert C.
Miller, Merton M.
Mirrlees, James A.
Modigliani, Franco
Mundell, Robert A.
Myrdal, Gunnar
Nash, John F.
North, Douglass C.
Ohlin, Bertil
Prescott, Edward C.
Samuelson, Paul A.
Schelling, Thomas C.
Scholes, Myron S.
Schultz, Theodore W.
Selten, Reinhard
Sen, Amartya
Sharpe, William F.
Simon, Herbert A.
Smith, Vernon L.
Solow, Robert M.
Spence, A. Michael
Stigler, George J.
Stiglitz, Joseph E.
Stone, Sir Richard
Tinbergen, Jan
Tobin, James
Vickrey, William
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