Wassily Leontief, “Structure of the World Economy”, NOBEL PRIZE Lecture, 11 December 1973.

Adam Smith, “The Wealth of Nations”, 1776 was the topic of an earlier blog post.

Ian Stewart, “In Pursuit of the Unknown: 17 Equations that Changed the World“, 2012 also was the topic of an earlier blog post 

 

Here I present: Wassily Leontief, “Structure of the World Economy: Outline of a Simple Input-Output Formulation”, NOBEL PRIZE Lecture, 11 December 1973.   

 

Wassily Leontif, is a mathematical Economist famous for “Input Output Economics (bookcover BELOW).

BASIC OF INPUT-OUTPUT.

Suppose we have a three (3) sector of a nation.  The sectors are “Coal”, “Steel” & “Electric”.  The three sectors have input/output numbers from zero (0) to one (1); and the input/output numbers are a “matrix”.

The flow 0.1 is Electric to itself; and, flow 0.2 is Steel to itself.  Coal has 0.0 flow to itself (as shown BELOW).   All sections summations of input/output is 1.0 

Here I presented: Wassily Leontief, “Structure of the World Economy: Outline of a Simple Input-Output Formulation”, NOBEL PRIZE Lecture, 11 December 1973.

SUMMARY.  

Leontif Input-Output formulation is essentially tabular as that shown BELOW.
Sector of an economy are: 1, 2, …, Z  are used to form the analysis matrix.

 This is a typical mathematical economics subject today that is taught in schools.  The matrix method is very popular with students, and easy to use in explaining a complex economy.