He was invited to the United Stated by the National Board of Economic Researchers in New York and in 1931 was offered a teaching post at Harvard. There he began to develop the analysis for which the Swedish Academy awarded him the prize.

Leontief's input-output analysis, in line with his perspective on economics, is value-free and applicable to a variety of market structures.

Basically, the method highlights the interdependence of economic systems-both socialistic and capitalist ones-by recognizing that most goods have a dual nature. What is produced (output) by one industry is used (an input) by another industry to produce something else.

The analysis has ready applications for any type of economic system. In the Soviet Union, for example, input-output analysis has the potential to be used to plan annual production quotas. However, the complexity of data involved has limited Soviet use of the model.

In the U.S. economy, where no central planning is involved, the model can be used to predict consequences of a change in distribution. For example, if fewer resources were allocated to military production, the model could predict which firms and what industries would suffer as a result, and by how much.

In a lighter moment, Leontief compared his Nobel Prize-winning input-output analysis to a cooking recipe: "You add some ingredients, and then you figure out how the whole thing hangs together."