548

PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 2H

diagonal element of the i-th column of (I-a- 5)". Accordingly,


dlogv; _ dlog y;
38) 7F “dr =°

=~

In words, if industry ¢ makes a technical improvement of the
neutral type, the long-run equilibrium prices of good 7 decrease
 proportionately more than the other prices.
Clearly (38) implies dy/dF;>0; therefore, the curve pp’
in Figure 1 shifts upward in the diminishing phases and downward
 in the increasing phase (see Figure 2a). The intersection
of the new curve p” p’” after the technical change with the 45°
line results in a new voN NEUMANN rate of interest #!. Usually
we have >r. But as in the case illustrated in Figure 2b a
technological change of the neutral type may perversely bring
forth a decrease in the von NEUMANN rate of growth. We shall
refer to the increasing part ww’ of the curve pp” as the perverse
part and to the other part as the normal part. (See Figures 2a
and 2b). In any case, however, we have dy /dF,>0. so that

“'GURE

IGURE 2-b

y| Morishima - pag. 20