# Full text: Study week on the econometric approach to development planning

```SEMAINE D’ETUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIQUE ETC.
row and column conditions satisfied. Thus, after » + 1 iter-
ations. we shall obtain
Sadly —1 451 A xR+L, =1 991
(IV. 57) ("Huet out Axo tly = oe =u,
For a sufficiently large #, the term in brackets in (IV. 57)
can be taken as an estimate of A. This we call the RAS method.
The Belgian tests described in [9] show that the RAS
method works well, provided that it is possible to estimate
the controlling totals # and v, accurately and that certain coef-
ficients, whose determination is different from that expressed
by the theory, can be detected and estimated directly. For
example, there has been a general tendency for coal input-coef-
ficients to fall as a result of the competition of electricity and
oil; but this tendency is at work only where coal is used as a
fuel and not where it is a raw material, as in coke ovens. Since
the theory is incapable of handling such exceptional cases and
since coke ovens use a lot of coal, it is important to estimate the
input of coal into coke ovens independently, remove this
amount of coal from the transaction table and the controlling
totals, and add it back after the remaining items in the matrix
have been calculated.
An up to date matrix obtained in this way can only be
approximate, and the next thing to do is to discuss the entries
with experts in the different industries. In many cases signifi-
cant improvements can be made in this way, but there will
always remain a number of industries for which little or no
up to date information can be obtained and which will still
have to be handled in a theoretical way.
For purposes of projection, the theory can only offer the
simple method of extrapolating the coefficients along exponen-
tial trends. Thus if A, denotes the estimated coefficient matrix
for year 1, and if A,, denotes the coefficient matrix for a future
year, 2, expressed at the prices of year 1, then
(IV. 50,
1] Stone - pag. 69
```

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