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

```278 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28
the quadrant x>0, zZ0 according to the signs of à, 2, that
‘follow from (65). Figure 17 sketches the trajectories of the
point (x, z,) starting from arbitrary initial values (x,, z,).
Each trajectory is defined as the solution x(z) with x(z,)=x,,
or z(x) with z(x,)=z,, of the corresponding differential equation
dz _ u(x) g@)—x dr w@) g'(&—e
( regs I esis ET me, JT ts mele, Bore
66) de u(x) g@@—o" RE æ) g(2)—æ
respectively, obtained from (65) by elimination of #. Any seg-
ment of any trajectory defines a path optimal on a suitable
time interval with prescribed initial and terminal values z,, zr
of z,. If we prescribe only z, and examine the trajectories for
various x, We find that there is one unique value £, of x,
which together with z, identifies a trajectory (shown in the
diagram as a heavier line) that meets condition (x) of Propo-
sition (I) of an asymptotic approach, for f—oo, to (£(p), 2(p))
as defined in (60), Proposition (H).
We now denote the path resulting from that particular
choice à, of x, by £,, 2). If z,<2(p), the initial consumption
low £, leaves room for growth in the capital stock per worker,
and both #, and 2, increase with ¢ to approach their asymptotic
values £(p), 2(p), respectively, as t—oo. If z,>%, both £,, £,
decrease, and approach the same asymptots from above. Fi-
nally, if z,=2(p) we must have £, = £(p), #,=2(p) for all #=o.
Since #, approaches the positive number £(p) as t—oo, p,
is by its definition (21) asymptotic to e=°* u(£(p)). Hence, in
30), lim pr(zr- 25)=0 by (40), and (£,, %,) is optimal.
Too
Moreover, if (x, z,) differs from (£, #,), we must have x, #\$,
for some à, because in the contrary case (36) and z,=2, would
imply z,=#, for all £. But then, by the attainability condi-
Hon (35 ¢), we have a strict inequality in (24) and, by (25),
a strict inequality in (30), hence (x,, z,) is not optimal. There-
"41 Koopmans - pag. 54
```

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