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

For example, in the consumer classification the category 
clothing’ includes the principal products of five industries: 
textiles, clothing, other manufacturing, transport and distri- 
bution. For this reason we carry out our analysis of consumers’ 
demand in two parts: first, an analysis of this demand in terms 
of consumers’ categories; and second, a conversion from these 
categories into commodity categories and hence into demands 
on industries. 
Class 4 relates to government purposes. Like private con- 
sumers, government departments habitually classify their ex- 
penditure in a manner different from that used for industrial 
products. But this time it is not a shopping list that is used 
but a classification by purposes: health, education, defence 
and so on. In order to form any view of future demands for 
these purposes we must work with this classification, but in 
order to relate these demands to demands on industries we 
must convert them into a commodity classification. 
It is for these reasons that we have four classes of produc- 
tion accounts. As a consequence we have an elaborate account- 
ing system which many people may regard as tedious and 
‘echnical. So, in principle, it is. But in principle does not 
mean in practice, and a realistic representation of the actual 
world inevitably requires such technicalities. 
I shall not continue with a list of classes and the reasons 
for adopting them; all such details can be found in [8]. 
Instead, I shall mention one part of the existing structure that 
we hope to change and a number of directions in which we 
nope to develop. 
The change will come not in the structure itself but in the 
numerical value of the entries. As I have mentioned, we divide 
capital expenditures between replacements and extensions. In 
SAM, replacements are calculated by reference to past capital 
expenditures and to the life-spans of different kinds of asset, 
which are assumed to be fixed. We know perfectly well, how- 
ever, that while there may be an average life-span for any 
I] Stone - pag. 38

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