Wassily Leontief, 1906-1999, was a Russian economist, naturalized an American citizen. He was Professor at the University of Kiel, Harvard University and New York University consecutively. He was awarded the Noble Prize in Economic Sciences in the year 1973, “for his developments of the input-output method and for its applications to important economic problems”.
Leontief is considered as being the father of the input-output technique, from which the production system is described as a network of deliveries among the numerous production sectors. This work relates to François Quesnay‘s earlier Tableau économique, which was a simpler way (but also less reliable) to understand economic flows. Leontief introduced this concept in his “The Structure of the American Economy, 1919-1929: An Empirical Application of Equilibrium Analysis”, 1941. He used his mathematical talent to analyse demand and supply elasticities with empirical work. The object of this analysis is to try and answer the question of how much does the production of each sector has to be increased, in order to meet the desires of consumers, investors and exporters, in case of an increase in demand. This system has been used in many areas, but it has been a major contribution when dealing with forecasts and planning at both the short and long term. Its utility has been proven at the public and private sectors and at the different economic theories.
In 1954, Leontief empirically tested the Heckscher-Ohlin model, using data from the year 1947 and the input-output table. The results of his research were surprising as they challenged the Heckscher-Ohlin theory. This discovery is known as the Leontief paradox which shows that a high capital-per worker country will have a lower capital-labour ratio in exports than in imports. Leontief´s finding motivated a search for a new theory of trade that could account for his results