History of Economic Thought. V. Leontiev: economic model "Input

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83. V. LEONTIEV: ECONOMIC MODEL "INPUTS - OUTPUT"

One of the prominent economists, the developer of the system of intersectoral "input-output" balances used in the practice of modeling national and world economies, Wassily Leontiev (1906-1999) was born in St. Petersburg, studied at Petrograd University, worked in China, Germany.

W. Mitchell invited him to the USA, to Harvard University. long time Leontiev He headed the Harvard Economic Research Institute that he founded. Later he organized and worked as director of the Institute for Economic Analysis at New York University.

V. Leontiev entered the history of economic science as the developer of a method called “input-output”. He set out to “anatomize” the system of interdependencies in the economy as one whole. The tool for intersectoral analysis is balance table, dividing the economy into several dozen industries.

Balance table is a mathematical model that allows you to understand how much resources are used to produce final products, for example, how much electricity, metal, rubber, glass, fabrics, plastics is required to produce one car.

Material requirements (or costs per dollar value) are calculated using both direct and indirect supplies. To simplify the table and not make it too cumbersome, “products” are combined into larger groups. "The interconnection of sectors is analyzed through system of equations, the parameters of which are production cost coefficients. The products of one sector, for example industry, are divided into parts, one of which is used for the production of goods from other sectors (intermediate products), the other - for the production of final products (final consumption). An input-output model helps you understand how changes in one sector affect production in other sectors.

Forecasts Leontiev often proved to be more reasoned because, unlike other publications, they took into account the consequences of cross-industry relationships.

The theoretical input-output model served as the basis for constructing diversified model of the US economy. The development of dynamic input-output models has been used to analyze the consequences of various economic policy options. The Roosevelt government attracted V. Leontieva to the development systems of balance relationships, which, in particular, made it possible to quite clearly regulate the mass production of weapons during the Second World War.

Input-output tables are used to compare the structural properties of two economies, or to compare the structure of one country's economy over different periods of time.

A distinctive feature of the work Leontiev is a close combination of theoretical analysis with the use of actual data. As stated Leontiev, the theory of general economic equilibrium "is the core of modern economic theory."

Author: Tatarnikov E.A.

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