Study week on the econometric approach to development planning

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Monograph

Identifikator:: 1824422792

URN:: urn:nbn:de:zbw-retromon-217476

Document type:: Monograph

Title:: Study week on the econometric approach to development planning

Place of publication:: Amsterdam [u.a.]

Publisher:: North-Holland Publ. Co. [u.a.]

Year of publication:: 1965

Scope:: XLVII, 1259 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: A new theoretical approach to the problems of economic growth / Luigi L. Pasinetti, King's College - Cambridge - Great Britain

Collection:: Economics Books

684 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28 slows down the growth of the whole system (4). Empirically this is absurd. If that commodity, for example, happens to be one that consumers do not want to increase, there is no reason why the growth of the whole system should be kept back simply in order to fulfil the unjustified requirement of a uniform rate of growth. In practice, the production of that commodity may quite well be kept constant or even decreased or eliminated altogether if better and cheaper substitutes can be invented. All this means that, following consumers’ pre- ferences both with regard to the composition of consumption and to the rates of expansion of each single production, it might quite well be possible to achieve an over-all rate of growth which might not only be better, on utility or welfare grounds, but which might also be higher than voN NEUMANN’S maximum uniform rate. To conclude: there is no ground whatsoever for an exten- sion of the voN NEUMANN concept of maximum rate of uniform growth to an economic system in which there is technical progress. In no case would such a maximum rate of uniform growth produce an optimum pattern of growth in terms of atility and welfare. Moreover it may even turn out to be numerically lower than the over-all growth rate achievable by following the sectoral rates of expansion indicated by con- sumers’ preferences (5). Now the reader may better understand why the dynamic analysis of the previous pages has been freed since the begin- (*) This criticism was already raised by D.G. CHAMPERNOWNE in his 1 Note on J. V. Neumann's Article on « À Model of General Equilibrium », « The Review of Economic Studies », 1945-46. This Note is quite indi- cative of the preoccupations of economists at that time. Mr. CHAMPERNOWNE does point out the limitations of von NEUMANN’S assumption of constant returns to scale but mainlv with referenre to the case of decreasing returns to scale. (°) It may be useful to add here that the criticism developed in the text applies in its entirety to the so-called turn-pike theorem, which was pro- posed by DORFMAN-SAMUELSON-SoLOW (op. cit., pp. 320-231) and is now so widely discussed in the economic literature ‘101 Pasinetti - pag. Ia

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