SEMAINE D'ETUDE SUR LE ROLE DE L ANALYSE ECONOMETRIQUE ETC. 
0Q7 
Fourthly, it is possible to show the orientation which is required 
in the development policy of underdeveloped countries. 
9) I have finished my own exposition, but there is just one 
more point, I would like to discuss. This point is related to some 
of the other papers presented here, namely HAAVELMO’s paper, 
LEONTIEF’s and THEIL’s. These three papers accepting as a valid 
hypothesis that if real capital is increased there is a proportionate 
increase in real national income. 
This means that they assume the relation 
pe 
as a production function, where R, C and y are respect 
national income, real capital and the capital output ict. 
relation is apparently derived from the practical const:=- 
capital output ratic 
aval 
Mis 
he 
but the deduction is in fact a very questionable one, empiricu!” 
and theoretically. 
First, as I said in the discussion on LEONTIEF’s and HAAVELMO’s 
papers, from an empirical point of view this hypothesis is com- 
pletely unacceptable. 
The only data we have, at least to my knowledge, are the results 
obtained by DouGLas and his followers. According to them, the 
elasticity of real income with respect to real capital is of the order 
of magnitude of 0.2 to 0.25. If we use these values in the 
Haavermo, LeoNTIEF and THEIL models we will find very very 
different results. In particular LEONTIEF’s results are not as optim- 
istic as they appear in his paper 
21 Allais - pag. 301