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

different kinds of financial intermediary, and to add a new 
class of accounts relating to different kinds of financial claim. 
In the second place it means a serious attempt to construct 
sector balance sheets, an aspect of the social accounts which, 
in Britain, has only recently been pioneered in the work of 
MORGAN [26] and in the as yet unpublished study of the na- 
tional capital on which REVELL has been working at the De- 
partment of Applied Economics. 
A third development which seems to me desirable is to add 
a regional dimension to the model. As our model stands at 
present it is a purely national model and therefore has nothing 
to say on the regional aspect of any economic activity. But 
regional problems are obviously important. Again, it is a 
matter of time and money. 
The relationships of the steady-state model, as they stand 
at present, can be summarised conveniently in a flow diagram 
which I have already made use of in [5] and which is repro- 
duced here as diagram 4. This consists of four interacting 
circuits which enable the model to be built up gradually and the 
complexities of the real world to be introduced bit by bit. 
In my description I shall mention two further circuits which 
do not appear in the diagram. 
a) The circuit of real flows. If we begin at the beginning 
of this circuit, we find two boxes labelled consumption demands 
and rates of growth in demands. Consumption demands relate 
to both private and public consumption and include, so as not 
to complicate the diagram unduly, investment in consumer’s 
durables, housing and social capital such as schools, hospitals 
and roads. For the moment let us assume that we have suc- 
ceeded in calculating the level of these demands in 1970, have 
1] Stone - pag. 40

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