ABSTRACT OF PAPER
Title: The relationships between input-output analysis and Walras' models: general equilibrium as a tool box.
Author:
The goal of this communication is to discuss the relationships between Leontief’s input-output analysis and Walras’ general equilibrium theory. In Leontief’s first works (1936, 1937) input-output analysis was defined as an attempt to « apply general equilibrium theory »; after 1945 models of Leontief were intensively discussed within the general equilibrium framework and commentators followed Leontief’s Walrasian interpretation of his model (Samuelson and Solow, Malinvaud). However, later, many economists (Gilibert, Kurz and Salvadori) and, sometimes ambiguously, Leontief himself replaced this Walrasian interpretation in favor of a classical one. We will examine Leontief’s arguments, sometimes in favor of the classical interpretation and sometimes in favor of the Walrasian interpretation (constant technical coefficients). It will be argued that Leontief’s view of the economic system as a circular flow was compatible with Walras’ representation of production and of circulation. This may explain why input-output analysis was defined by Leontief as an “attempted application of the economic theory of general equilibrium” (1949) that is to say as “an outgrowth of neoclassical theory” (1998) and also “a practical extension of the classical theory of general interdependence” (1987). It will be shown that Leontief’s use of general equilibrium concepts, in a different context from Walras’ one, deeply transmuted the initial meaning of Walras’ analysis.
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