PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 26 
if the growth of the components of the output vector deviates 
from linearity. The problem has therefore a particular bearing 
on the transient model. So far however, we have not done any 
work on the decomposition of K. 
Having thus determined investment demands, the next thing 
to do is to determine output levels. This follows immediately 
from (IV. 4), since 
g=(I—A)y*(v+e¢ 
TV. 7) — (I _ A)-t S [K(1— AF 
The elements of g are gross outputs. Their units might 
be physical, such as tons of steel or kilowatt-hours of electricity, 
but in practice, because of the coarseness of our product clas- 
sification, they are values. 
Our problem now is to pass from gross outputs to net 
outputs, or values added, since these are the output measures 
which influence most directly the industrial distribution of la- 
bour and the industrial distribution of assets. To handle this. 
problem we shall assume an initial vector, p say, of product 
prices. How this vector is determined and modified in suc- 
cessive rounds of calculations we shall see when we come to 
‘he price circuit. For the moment let us take it as given. 
If we use f to denote a vector of primary inputs per unit 
of output, then, corresponding to (IV. 1), we can write 
‘IV. 8 
p=A'p+] 
i 
AV. 0) 
;—d-A)p 
1 Stone - pag. 44