The Second Leontief Paradox: Economic Theory or Economic Engineering?

Abstract

The article analyzes the situation, conventionally called the "Second Leontief Paradox", when a recognized scientist, Nobel laureate and undisputed authority in the academic environment, it turns out, has practically no place in modern economic theory - neither within the "mainstream" nor in unorthodox directions. This paradox is considered in the context of four questions: (1) does Leontief have a “theory” at all; (2) to which theoretical school Leontief belongs or at least gravitates; (3) what is the main factor in the formation of the paradox under consideration; (4) what are the prospects for Leontief's approach in macroeconomics. To understand this paradox, it is proposed to use the terms introduced by G. Mankiw - an economist as a scientist and an economist as an engineer. It is concluded that there is still a gap between "theory" and "engineering" in economics. It is assumed that such a gap, including in connection with the rapid growth of a large amount of economic data and universal digitalization, may gradually decrease.